By Obinna Chima
Nigeria has been identified as one of the top five countries for growth acceleration for 2018. Other countries in the group include Kuwait, Oman, Kazakhstan and Tunisia.
The Global Chief Economist at Renaissance Capital, Charles Robertson, who made this forecast in a report titled: “Africa 2017,” urged investors to take advantage of the opportunities in these countries.
“These are some of the markets I think investors should be considering because of the growth acceleration story,” he explained.
According to Robertson, Nigeria still has a very positive demography, pointing out that the country’s working age population has been growing at 15 per cent over the past five years.
The global analysts observed: “Nigeria’s Ease of Doing Business is presently at 169th in the world. But I am promising you that it is going to get considerably better in the next 12 months. This government has actually started to reform.
“They have slashed the time to register a new business from 10 days to two days. I think as you get the Ease of Doing Business better, you should also see some improvement in corruption ranking. It is never going to be dramatic. We do know President Buhari has tried to make some difference.”
He also noted that there has been improvement in Nigeria’s legal system.
Robertson also argued that at its present rate, the naira exchange rate is expensive as the official rate. He called for a currency reform in Nigeria, arguing that, “currency pegs don’t work in countries with low per capita income. The naira is either too weak or too strong.”
Nigeria’s budget and forex reserves depend on the performance of crude oil. Oil has been on an upward trend in the last 12 months.
“But my view is that shale would keep it down. What I think drives oil is China. When China’s Gross Domestic Product (GDP) was booming, we had oil price shooting up, but when China’s GDP stopped rising last year, the oil price was down. There should be some recovery, I would argue, in the next few years. If there is one thing which worries me today, it is Chinese loan growth.
“I still think there is a story here which is working. The story is that the last time oil fell, which was in the 80s, GDP in Nigeria fell by over 10 per cent, not just once, but multiple times throughout the decade.
“But in the 90s, when oil prices were low, Nigeria was not even in recession. But this time, it fell by 1.5 per cent last year, which was a much better performance than in the past. The human capital has changed, not just in,” he said.
CBN Governor, Mr. Godwin Emefiele recently predicted that with economic policies put in place by the Nigerian government, the country should be out of recession by the third quarter of the year. Emefiele who assured that the CBN would continue with its intervention in the foreign exchange market, noted that interventions of the apex bank so far had been yielding positive results.
The legislature last week passed the 2017 Appropriation Bill for the year, with an increment of N143 billion to N7.441 trillion, from the executive’s proposal of N7.298, five months after President Muhammadu Buhari submitted the federal government’s spending bill. Faced with pressure from the public, which remained unrelenting for years, and in keeping with its promise this year to do so, the National Assembly, on Thursday, finally released a 33-page document detailing the line-by-line expenditure of its budget for 2017. The National Assembly’s budget was increased by N10 billion to N125 billion, from the N115 billion proposed by the executive.
Under its budget, N85.8 billion was assigned to total overhead costs, N23.7 billion for personnel costs and N14.9 billion for capital projects.