NIGERIA APRIL ECONOMIC REPORT - Sky-high oil prices steal limelight
Sky-high oil prices steal limelight
Stronger Purchasing Managers’ Index numbers for April indicated firmer economic growth in the month as the Nigerian economy continues its cyclical recovery from the 2017 recession. Nigeria’s disinflation also continued at pace. Following a fall in inflation to a 2-year low of 13.3% y/y in March, we anticipate further moderation with our April forecast at 12.6% y/y. Despite the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) holding interest rates at the start of April and providing no clear forward guidance on rates, market interest rates have moderated with inflation. This moderation in interest rates has been supported by CBN primary market activity and Open Market operations (OMO) where it has guided interest rates lower, with yields on Nigeria’s fixed income securities taking a cue. In contrast, fiscal developments remained scarce as the April 24 deadline for 2018 Budget passage deadline passed without any fanfare – or budget – and no significant information was shared on 2017 Budget implementation, raising questions about the potency of fiscal stimulus so far this year.
Oil price enjoyed its best month since November 2014, as Brent crude averaged $71.76/bbl and broke the $75/bbl mark for the first time since 2014. Geopolitics have been the primary driver of this unexpected surge in oil prices this year. In particular, lingering fears of a U.S.-China trade war, the ongoing Saudi Arabia-Iran proxy conflict in Yemen, and President Trumps’ unwillingness to renew the 2015 nuclear sanctions deal on Iran have put a spotlight on future oil production in the Middle East. Overall, persistent geopolitical tensions and strong OPEC commitment to the output deal is likely to keep oil prices at these high levels, offering excellent support for Nigeria’s fiscal position, exchange rate stability, and economic growth efforts.
Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.