Connect with us
iubh
Advertisement
Alpha
Advertisement
Hotflex
Advertisement
Advertisement
Advertisement
UBA
Advertisement
Patricia
Advertisement
app

Economy & Politics

Nigeria’s GDP growth to rebound between 1.7% and 2.0% in 2021 – United Capital report

Nigeria’s GDP is expected to grow between 1.7% and 2.0% in 2021.

Published

on

FG says latest recession in Nigeria will be short-lived

Nigeria’s GDP is expected to grow between 1.7% and 2.0% in 2021, largely predicated on increased economic activities and improving oil market conditions.

This disclosure was made in the “Nigeria Outlook 2021 – A shot at recovery” report released by United Capital.

According to the report…

  • “In 2021, we expect GDP growth to rebound by 1.7% to 2.0%, buoyed by increased economic activity and some improvements in the oil market. Although the reopening of the borders in Q4 2020 should ease pressures on food prices, other structural factors such as FX market illiquidity, potential increases in petrol price, etc. may keep general prices elevated. As a result, we expect the headline inflation rate to peak at around 16.0% before pulling back, if no further policy adjustment is made.
  • “Again, the high base effect of the headline inflation spike in Q3 and Q4 2020 should moderate further increases in price levels. In response to rising inflation and in a bid to attract FPI inflows to the market, we imagine that the CBN would begin to tighten its monetary policy stance at some point in Q2-Q3 2021.
  • “On the exchange rate, we expect a potential convergence of rates when the CBN begins full intervention at the I&E window. As such, we anticipate that the parallel market will appreciate from N470/$ towards the NAFEX rate which has now been adjusted to N410/$.
  • “In 2021, the direction of the monetary policy would continue to drive the sentiments for stocks as regards the yield environment. Accordingly, our prognosis for the Nigerian stock market in 2021 is that domestic interest, fuelled by dividend expectations, is likely to sustain the market rally in Q1-2021. However, in the absence of foreign demand, we see a short-term bear market from Q2 to Q3-2021”

Other key highlights of the report

  • In the course of the year 2021, the monetary policies are expected to be flexed to stimulate the growth of the economy as well as assuage the subsisting harsh impacts of the COVID-19 pandemic.
  • The report succinctly states, “We imagine that monetary authorities will further ease or maintain policy rates at current levels till Q2 2021 to allow economies recover fully before contemplating tightening from Q3 2021.”
  • The GDP of Sub-Saharan Africa (SSA) is expected to rebound in 2021, though the rate of recovery shall vary from country to country. The improved exports, as well as commodity prices are expected to drive the growth, more especially as the global demand seems to be gradually recovering from the devastating impact of the pandemic.

Bottom line

With the second wave of COVID-19 infections and imminent lockdowns in several nations amidst limited access to vaccines, the growth projections might be threatened.

0

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business News

Financial Autonomy: Governors, State Speakers reach agreement

The Governor also said that the final document of the agreement should be ready for implementation by May 2021.

Published

on

The Governors’ Forum, Conference of Speakers of State Legislature and other governance stakeholders announced that they reached a resolution over the implementation of financial autonomy for State Legislature and Judiciary.

This was disclosed by the Ekiti State Governor and Chairman Nigeria Governors’ Forum, Kayode Fayemi, after the meeting, which was held in Abuja on Monday, and presided by the Chief of Staff to the President, Prof. Ibrahim Gambari.

What the Governor said

“We are here for legislative and judicial autonomy and Governors; Speakers of State Assemblies and the Judges of the States are on the same page as far as this issue is concerned,” he said.

We just emerged from a meeting with the Solicitor General of the Federation, the representatives of the judiciary and those of the Conference of Speakers and we are all in force; an agreement has been reached.

READ: Finance Minister tasks FG and state governments to control spending

The issue is about implementation. There has been no objection from governors on judicial and legislative autonomy.

As a matter of fact, it would not have passed if governors were not in support in the first instance. So, that issue has been fully and holistically addressed,” Fayemi said.

The Governor also said that the final document of the agreement should be ready for implementation by May 2021 and urged striking workers  to return  to offices “because as far as this has gone, we have met with all the parties concerned and the President, through his Chief of Staff, has been monitoring what has been happening.”

What you should know

Nairametrics reported earlier this month that members of the Judiciary Staff Union of Nigeria (JUSUN) went on strike with the closure of Federal High Courts in different states across the nation. The union said the purpose of the strike was to draw attention to the financial autonomy of Nigeria’s Judiciary.

+1
Continue Reading

Business

Finance Minister tasks FG and state governments to control spending

The Minister also denied claims that the FG printed N60 billion as top-up for March FAAC numbers.

Published

on

land borders to be reopened soon, Finance, Ministaer, vow to recover AMCON debt through issuance of promissory notes, FG reiterates stance on IPPIS as ASUU threatens strike, Finance Minister, Zainab Ahmed identifies capital market as key driver for economic growth , Nigeria has paid $1.09 billion to service its debts in 2019  , Dividends on oil proceeds will be taxed - FG , State governments own most bad roads - Finance Minister says, Budget deficit increases by N351.98 billion, as FG misses revenue target, Economy: Funding MSMEs in Nigeria , Finance Bill: New tax regime to take effect from Jan 2 - FG , Again, Finance Minister argues that Nigeria is not in debt distress , ECOWAS: Single currency regime not kicking off in 2020  , FG: CBN holds N43 billion stamp duty charges collected by banks , FG may shift deadline to deactivate bank accounts without tax verification, Confusion as ministry and presidency disagree over Finance Act start date, 7.5% VAT: Implementation to begin Feb 1 – FG , Finance Minister: Nigeria to go into recession if ..., Foreign tech companies that will now pay tax to FGN: see the criteria

The Minister of Finance, Zainab Ahmed, has called on Governments on all levels in Nigeria to control spending amid decreasing revenues and urged for prudent government spending. The Minister also denied claims that the Federal Government printed N60 billion as top-up for March FAAC numbers.

The Minister disclosed this in an interview on Monday and warned that the FG was not generating enough revenue to align with its spending habit.

READ: UK to return £4.2million seized from Ibori to Nigeria

Zainab Ahmed added that the FG would maintain its stance from January 2021 to end total fuel subsidies in Nigeria, and confirmed talks with organised labour on subsidy removal.

“As a nation, the Federal, State and Local governments must review expenditure patterns. We are spending too much and we are not generating enough,” she said.

READ: Resolving the global debt and liquidity crises, issues and possible solutions

What you should know 

Nairametrics reported last month that the Debt Management Office had announced that Nigeria’s public debt at end of 2020 was N32.915 trillion. The DMO said the sum of the debt included the Debt Stock of the Federal and State Governments, as well as the Federal Capital Territory.

+1
Continue Reading

  





Nairametrics | Company Earnings

Access our Live Feed portal for the latest company earnings as they drop.