In its report released on Monday, February 18, 2018, titled, ‘Nigeria Economic Outlook Top 10 themes for 2019’ and made available to Business Insider SSA by Pulse, PwC states that volatility in the oil market may depreciate the Naira.
The global consultancy firm, however, said the forex market will remain largely stable this year depending on the global crude oil price.
According to the report, the price of petrol in one of Africa’s biggest oil producers may be re-adjusted from N145 per litre based on two highlighted scenarios – continuation of fuel subsidy or full deregulation.
President Muhamamdu Buharu and his main challenger, Atiku Abubakar (Eurasia group)
Former Vice President and candidate of the Peoples Democratic Party (PDP) Atiku Abubakar has promised to sell 90% of the country’s state-owned oil firm (NNPC) and deregulate the oil market by removing fuel subsidy. A move away from incumbent President Muhammadu Buhari‘s stance.
Here are other highlights from PwC’s 2019 economic outlook for Nigeria:
- Nigeria’s Inflation to increase marginally, driven mainly by base effects
- Exchange rate to depreciate in the latter part of 2019 with the Naira falling to a range of N390 to N415 against the dollar
- PwC predicts uncertainties around population figures and growth, forecasting Nigeria’s population to stand at 206 million by 2020
Nigeria’s population is exploding without commensurate infrastructure
- Foreign reserves to deplete further in 2019 as a result of elections
- The Nigerian economy to continue its sluggish recovery as PwC predicts a 2.5% growth for 2019
- PwC highlights four key risks to foreign investment. These are declining interest rate differentials as advanced economies continue to tighten policy rates, political instability following the 2019 elections, unfavourable investment climate, and broad macroeconomic instability. The report says Nigeria would need an investment rate of at least 26% of GDP to achieve a growth of 7% as the foreign direct investment (FDI) and foreign portfolio investment (FPI) dipped in 2018.