The Nigerian Economy And Prospects in 2020

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Saturday, December 21,  2019   /05:10AM  / By Bismarck Rewane, FDC Ltd/ Header Image Credit: FDC Ltd

 

Challenges

  • The market place is a leveller
  • Inflation is taxation without legislation - Milton Friedman
  • Economic variables do not discriminate
  • Cumulative inflation in the last 5 years - 752.92%
  •  Wage increase in the last 5 years is 66.7%
  • Exchange rate depreciation in the last 5 years: 53%
  • Average real estate vacancy ratio in Lagos & Abuja = 24%
  • Income per capita has declined from $2,719 in 2015 to $2,236 in 2019
  • Average poverty rate has increased from 33.1% in 2014 to 46.7% in 2018
  • Dependency ratio of the average elite has increased sharply
  • The level of income inequality i.e. the gini coefficient has spiked to 43.3
  • Investment options have narrowed
  • The NSE returned -18.8% in 2018 and -14.09% in 2019
  • The US dollar equity market (S&P 500) returned -4.4% in 2018 & -23.2% in 2019
  • As already stated property values have fallen
  • In upper class markets, sale prices have declined from average of 20 years rent to 14 years rent
  • Treasury bill rates have crashed from 15%p.a to 6%p.a
  • Bank deposit rates are down from 12%p.a to 7%p.a
  • Dividend yields are at an average of 5%p.a
  • Meanwhile, inflation is at 11.61%
  • Negative rate of return on money market instruments of 5.11% pa

 

Poverty & the Nigerian Consumer

  • Aggregate consumption is $386bn, 85.97% of GDP
  • Consumer income is squeezed and strapped
  • Challenges include:
  • Dwindling income per capita
  • High income inequality
  • Rising poverty rate
  • South West - 16%
  • North West - 45%
  • South East - 29%

 

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Recent Shifts and Trends

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About The Author

Bismarck Rewane is the CEO of FDC Ltd.


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Related News on Nigeria Economy

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Related News - Reviews and Outlooks

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Related News on Inflation

  1. Inflation - What Goes Up Will Go Up Again
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  5. Headline Inflation Increases By 11.61% YoY In October 2019; 0.36% Higher Than September 2019 Rate
  6. Inflation Rate To Tick Up By 0.08% In October 2019
  7. Inflation Succumbs to Border Closure and Money Supply Growth - Spikes to 11.24%
  8. Headline Inflation Increases By 11.24% YoY In September 2019; 0.22% Higher Than August 2019 Rate
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  10. Foreign Direct Investment To Africa Remained Steady In 2018
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Related News on Border Closure

1.         Nigeria's Border Closure And The AfCFTA ...Towards Alignment of Objectives

2.        Consumers May Frontload Festive Purchases On Border Concerns

3.        Nigeria's Foreign Minister Onyema, Lists Four Conditions For Reopening Borders

4.        FG To Extend Border Closure Till January 31,2020

5.        We Don't Have a Rice Problem - Understanding Sovereign Comparative Advantages - Tosin Adeott, Nov 04, 2019

6.        Lagos-Ogun Partnership for Economic Development - Thoughts on What Is Possible - Olufemi Awoyemi, Nov 03, 2019

7.        FG To Extend Border Closure Till January 31,2020 - Customs, Nov 04, 2019

8.        The Economics of the Rice Conversation - Between A Rock and a Hard Place - Oct 31, 2019

9.        The Effects of Nigeria's Closed Borders on Informal Trade with Benin - Brookings - Oct 30, 2019

10.     Thoughts on Nigeria's Rice Bubble - Fasua - Oct 25, 2019

11.      Border Closure Takes Its Toll on The Price Of Rice - FDC, Oct 22, 2019

12.     Inflation Succumbs to Border Closure and Money Supply Growth - Spikes to 11.24% - FDC, Oct 16, 2019

13.     Border Closure Hitting the Price of Rice - CSL Research, Oct 04, 2019 

14.     Border Closures May Only Offer Temporary Subsidy Reprieve - CardinalStone Research, October 11, 2019  

15.     Effects of Closing the SEME Border - Coronation Research, Oct 15, 2019

16.     Border Closures Begin to Take Toll on Prices CardinalStone Research, Oct 15, 2019 

 

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