Nigeria in 2020: H1 Review - Will It Get Worse Before It Gets Better?

Proshare

Saturday, August 08, 2020 05:27 PM / by RTC Advisory Service Ltd/ Header Image Credit: RTC Advisory Service Ltd


 Proshare Nigeria Pvt. Ltd.


Overview

  • The COVID-19 health pandemic and the resultant economic collapse occasioned by global policy responses especially the lockdown of major economies around the world, led the IMF, World Bank and UN-DESA to project global growth for 2020 at -4.9%, -5.2% and -3.2% respectively.

 

  • The IMF projects the Nigerian economy to shrink by -5.4% in 2020 while the World Bank's projection is slightly more conservative at -3.2% both in spite of the 1.87% growth recorded in Q1 2020 before the lockdowns commenced towards the end of March 2020. The growth in Q1 was largely driven by the oil sector which grew by 5.06% and non-oil sector growth of 1.55% including finance and insurance (20.8%), information and communication (7.7%), transportation (2.8%) and agriculture (2.2%).

 

  • Inflation rate continued to rise at 12.56% in June 2020 compared to 12.40% in the previous month. The exchange rate at inter-bank and BDC segments averaged N361/US$ and N447.71/US$ respectively. The foreign reserves at US$ 36.2 billion declined by 19.7% compared to the same month last year (YoY) and 1.12% when compared to the last month (MoM).

 

  • Nigeria's fiscal situation is more precarious! Federally collected revenue in Q1 2020 fell by 36.0% compared to quarterly budget estimates and 4.8% compared to Q4 2019. Government retained revenue at N864.9 billion and expenditure at N2.33 trillion, resulted in a deficit of N 1.46 trillion!!!

 

Global Economic Overview

  • The COVID-19 outbreak has resulted in a wholesale collapse of global economies with IMF, World Bank and UN-DESA projecting global growth for 2020 at -4.9%, -5.2% and -3.2% respectively.

 

  • Projections by IMF, World Bank and UN-DESA estimated growth in the United States between -4.8% and 8.0% in 2020. The average growth for advanced economies is projected at -8.0%, -7.0% and -5.0% by IMF, World Bank and UNDESA respectively.

 

  • Sub-Saharan Africa is expected to grow at -3.2%, -2.8% and -1.6% by the IMF, World Bank and UN-DESA respectively. According to IMF, Nigeria and South Africa are expected to experience sharp recession at -5.4% and -8.0% respectively due to the COV-ID crises.

Proshare Nigeria Pvt. Ltd.


Global Investment Trends and Flows

Global Investment Trends Summary

 

  • Global FDI flows stood at $1.54 trillion in 2019 and is expected to decline by 40% in 2020, reducing FDI below $1 trillion for the first time since 2005. The global FDI is further expected to decline in 2021 by 5-10%. This is attributed to the lockdown measures introduced across the world which is expected to slow down existing investment projects. Also, various policy measures introduced by governments including new investment restrictions are expected to severely affect global FDI flows.

 

  • In 2022, investment flows are expected to recover. Though, the outlook is highly uncertain depending on the duration of the COVID-19 crisis and the effectiveness of policy interventions to mitigate the effects of the pandemic.

 

  • In 2019, Nigeria is ranked the fourth highest recipient of FDI in Africa at $3.3billion, behind Egypt ($9.01 billion), South Africa ($4.62 billion) and Congo ($3.37billion)

 

  • UNCTAD projects the impact of covid-19 on FDI to vary across regions. In Europe and America, FDI flows are expected to fall by 30-45% and 20-35% respectively. FDI flows to Africa are expected to decline by 25-40% in 2020 largely due to low commodity prices.

 Proshare Nigeria Pvt. Ltd.


Download Full PDF Report Here


 Proshare Nigeria Pvt. Ltd.


Related News

  1. Agusto and GCR Affirm ''AAA'' Long Term Credit Rating of InfraCredit With Stable Outlook
  2. Nigerian Economic and Financial Markets: H1:2020 Review and H2:2020 Outlook Opportunity in a Crisis?
  3. Nigeria: 2020 Mid-Year Outlook - Into the Night
  4. NOVA Economic Outlook H2 2020 - A Contraction Like Never Before
  5. NSR H2 2020 (6) - Fiscal - New Budget, Same Old Problems
  6. NSR H2 2020 (5) - Currency - Calm Before a Storm?
  7. NSR H2 2020 (4) - Global Recession - The Pandemic Edition
  8. NSR H2 2020 (3) - MEA Region - A Period of Gloom and Doom
  9. NSR H2 2020 (2) - Balance of Payment - A Dire Outlook
  10. NSR H2 2020 (1) - Crude Oil - Cast in COVID-19 Shadows
  11. Moody's Announces Completion of a Periodic Review of Ratings of Union Bank of Nigeria Plc
  12. Moody's Announces Completion of a Periodic Review of Ratings of Sterling Bank Plc
  13. Moody's Announces Completion of a Periodic Review of Ratings of Access Bank Plc
  14. Moody's Announces Completion of a Periodic Review of Ratings of Fidelity Bank Plc
  15. Moody's Announces Completion of a Periodic Review of Ratings of FCMB Limited
  16. Moody's Announces Completion of a Periodic Review of Ratings of First Bank of Nigeria
  17. Moody's Announces Completion of a Periodic Review of Ratings of Zenith Bank Plc
  18. Moody's Announces Completion of a Periodic Review of Ratings of Guaranty Trust Bank Plc
  19. Moody's Announces Completion of a Periodic Review of Ratings of UBA Plc
  20. Moody's Announces Completion of a Periodic Review of Ratings of Nigeria

 Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP