|
yommyuk
|
Guys for your informations. See how our country is preforming.
Inside info.
Please bear with me (the tabs for the preformance indicators)
Assets
• Africa's leading oil producer, Nigeria boasts 31% of the African oil resources. Nigeria is also endowed with the world's seventh largest gas reserves and largely unexploited farm potential.
• With its hydrocarbon resources, Nigeria is one of the leading destinations for foreign direct investment flowing into Africa.
• The Nigerian banking system is one of the most developed on the continent and contributes to financing the economy.
• With half the population of West Africa, Nigeria plays a preponderant political role at both the regional and continental levels
Weakness
• Not only has the oil wealth fostered corruption but its insufficient redistribution has also stoked social, ethnic, and religious tensions.
• An economy largely dependent on oil revenues — which represent nearly 90°% of exports and about 25°% of GDP — has remained vulnerable to price and production shocks.
• Deficient transport and energy infrastructure — with only 40°% of Nigerians equipped with electricity — has limited the diversification of the productive fabric.
• With hydrocarbon sector producing only a limited bandwagon effect, poverty thus continues to afflict 70°% of the population
Rating D
A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high.
MAJOR MACRO ECONOMIC INDICATORS
NIGERIA
(USD billions) 2004 2005 2006 2007 2008(e 2009(f)
Economic growth (%) 10.6 5.4 6.2 6.4 6.2 6.0
Inflation (%) 15.0 17.8 8.3 5. 5 8.6 8.5
Public sector balance (%GDP) 6.3 8.1 7.7 0.9 4.4 4.2
Exports 36.9 50.2 59.1 61.3 78.9 80.3
Imports 19.4 25.6 31.1 38.8 44.3 49.9
Trade balance 17.5 24.6 28.0 22.5 34.6 30.4
Current a/c balance (%GDP) 4.9 7.1 9.4 1.8 6.4 1.2
Foreign debt (%GDP) 41.3 19.8 2.4 2.0 1.6 1.8
Debt service (%Exports) 6.2 8.2 17.3 1.9 0.7 0.6
Forex reserves (mths/imports) 5.8 8.3 10.1 11.2 14.1 16.6
MARKET SIZE
NIGERIA
Main Economic Indicators NIGERIA Regional average DC average
GNP per capita (PPP dollars) 1050 2029 5983
GNP per capita (USD) 640 842 2313
Human development index 0,453 0,450 0,672
Wealthiest 10% share of national income (%) 33 34 31
Urban population percentage 48 37 44
Percentage under 15 years old 44 43 30
Number of computers per 1,000 inhabitants 7 18 50
RISK ASSESSMENT
NIGERIA
Persistent tensions in the Niger delta in 2008 continued to affect oil production, reduced to two-thirds of its potential despite the start-up of operations of off-shore sites. Economic growth was nonetheless spurred by soaring oil prices and the dynamism of sectors outside hydrocarbons, particularly agriculture, construction, and telecommunications. Public sector investment in the farm sector and transport infrastructure in 2009, albeit less dynamic than the previous year, will continue to drive an economy undermined by the fall of world prices and a slowdown in foreign direct investment inflows associated with the international financial context. Inflation that exceeded 8% in 2008 as a result of soaring prices for foodstuffs (constituting 70°per°cent of the reference basket) is expected to continue as a result of the inadequate sterilisation of foreign exchange reserves.
Sustainability restored; abundant liquidity
The discharging of the debt owed to Paris and London Club creditors in 2006-07 greatly strengthened Nigeria's financial position. The latest IMF debt-sustainability analysis concluded in limited default risk in the medium-term. Outside hydrocarbons, however, the public sector and current account deficits have been disturbingly large, representing respectively a negative 45°% and negative 36°% of GDP reflecting an insufficiently diversified economic fabric. In this context, public sector debt will remain exposed to a loosening of fiscal discipline with foreign debt, now down to under 2% of GDP, remaining exposed to non-concessional borrowing sensitive to price downturns and production shocks. And, the regularity of additions to the oil stabilization fund (which totalled USD 23 billion in 2008), necessary to compensate for any prolonged downturn of prices, will bear watching. With Nigeria's foreign exchange reserves covering over a year of imports, near-term liquidity risk is insignificant.
The business environment: a critical risk factor
Nigeria's political and institutional shortcomings constitute, however, a critical risk factor. Coming into power in February 2007 via disputed elections, Umar Yar'Adua has not succeeded in imposing his authority, particularly in managing the Niger delta crisis. The intervention of federal armed forces in the delta in autumn 2008 sealed the failure of the negotiation process and prompted various rebel forces to form an alliance. At a more general level, the weakening of federal power and a president in poor health augurs a bogging down of the security situation. The priority given by the government to combating corruption has thus far not had any perceptible positive impact on the business environment with Nigeria remaining at the low end of governance rankings.
|
![Nairaland [Nigerian Forum] Home](http://www.nairaland.com/Themes/default/images/english/home.gif)
Author
