Now Reading:

Towards The Finishing Line, Still Time To Deliver

Reviews & Outlooks	4362 VIEWS
Reviews & Outlooks
4362 VIEWS

Wednesday, December 13, 2017 / 12:19PM /FBNQuest Research

Out of recession into weak growth

The economy has returned to the growth path, although not in per head terms and largely due to the recovery in oil output. Household demand remains soft. The services sector contracted y/y in Q3 2017. We see growth at just 0.8% this year and 2.1% in 2018, based upon rising crude production, a fiscal stimulus and investment in pockets of the economy.

Time for fiscal policy to deliver

The FGN is confident that its cumulative expansionary fiscal policy will bear fruit in 2018 in the form of completed projects and the knock-on effects. (If it is right, there could be electoral considerations.) It can also convert the recent Eurobond sales into capital releases in coming months.

Talk of better revenue collection, too

The data is patchy but it appears that aggregate revenue collection has picked up steam in 9M 2017. If confirmed, this increases the FGN’s room for fiscal expansion and delivery.

Stable fx policy in the year ahead

The CBN is rightly pleased with its unorthodox multiple currency practices. Turnover on NAFEX has gathered momentum and contributed to healthy growth in reserves, along with better oil revenues and the fx debt sales. Reserves are heading for US$40bn and above. The CBN is under no domestic pressure to abandon its practices.

Scope for gentle monetary easing

The monetary policy committee has not changed stance since July 2016. Yet we see scope for easing as headline inflation is due to slow in H1 2018 on positive base effects. Independently, the rates on FGN naira paper are falling on official debt strategy, the early success of NAFEX and the return of the offshore investor. Happily for the FGN, this trend has further legs.

Click Here To Download Full PDF Report

2. Outlook Stable for Financial Infrastructure Companies in 2018

3. Uptick in IMF’s Global Growth Forecasts

4. Nigeria-Based United Bank for Africa Ratings Affirmed; Outlook Stable

5. Transcript of the Press Conference on the Release of the October 2017 World Economic Outlook Fitch Rates Nigeria's Upcoming USD Notes ''B (EXP)''

6. Moody''s Downgrades Eight Nigerian Banks Following Downgrade of Nigeria''s Government Bond Rating

7. DMO Responds to Moody’s Sovereign Downgrade Rating on Nigeria

8. One-day Conference on ‘Nigeria’s Economic Outlook’ by Dr. Teriba to hold on Sept 28

9. A Sovereign Downgrade from Moody’s

10. Sweet Spot for World Economy Won't Last Beyond 2018

11. Moody's Downgrades Nigeria's Sovereign Issuer Rating to B2 With a Stable Outlook

12. Nigeria's Economic Recovery: Defining The Path For Economic Growth