Nigeria’s economic outlook for the year looks positive. Solid growth is forecast for the year.
Nigeria’s economy is expected to grow around 7 per cent this year and next thanks to solid performance in industries outside of its bedrock oil sector, a Reuters poll showed last Thursday. The forecasts, based on a poll of 11 analysts, paint a strikingly positive outlook for Africa’s most populous nation of 140 million people, which has started 2012 on a decidedly shaky footing.
President Goodluck Jonathan was forced to row back on the removal of costly fuel subsidies after a wave of strikes and protests, and Islamist group, Boko Haram has dramatically stepped up a three-year insurgency. The group, whose name means “Western education is sinful” in northern Nigeria’s Hausa language, has killed nearly 1,000 people since 2009, including at least 178 this week in a series of gun and bomb attacks in Kano, Nigeria’s second biggest city.
“The political battle to end the petrol price subsidy in January is in many ways a microcosm of the wider political battle within the political elite over the reform process,” Citibank said in a note.
“Its eventual outcome will be a clear indication of the potential speed with which the current government can implement structural reforms in 2012.” GDP growth in Africa’s most populous nation dipped to 7.4 per cent in the third quarter of 2011, a year earlier, from 7.7 per cent in the second quarter. The government’s forecast for 7.0 per cent in 2011 is in line with Reuters consensus. Despite the political instability, analysts said the allure of such a huge consumer market will continue to attract investment.
“We expect to see strong growth in Nigeria, bolstered by robust expansion in the non-oil sectors, particularly retail, telecoms and construction,” said Gregan Anderson of London-based risk consultancy, Business Monitor International.
Nigeria has under performed economically last few years. It has yet to reach its full potential economically given its size and demographics, all which are good solid foundations for growth. Political instability and region tensions among its states, provinces have held back growth and development.. Until Nigeria gets a handle on this, robust growth year after year will be hard to come by.