2018年-世界发展银行全球_Nigeria_Biannual_Economic_Update_April_2018___Connecting_to_Compete_53页_3mb

2018 Nigeria Biennial Economic Update Summary

Core Content

The Nigeria Biennial Economic Update by the World Bank provides an overview of recent economic developments, short-to-medium term outlook, and a special focus on regional connections and coordination to enhance Nigeria's competitiveness.

Recent Developments

• Economic Recovery: Nigeria emerged from a 25-year recession in 2017, with GDP growth of 0.8%, primarily driven by oil production (up 5%) and agriculture (up 3.4%).
• Non-oil, non-agriculture sector: Continued to decline by 0.6%, due to weak aggregate demand and low private sector credit.
• Unemployment and underemployment: Increased in 2017 due to the contraction of labor-intensive sectors.
• Poverty: Slightly increased in 2017.

Current Account and Foreign Exchange

• Current Account Surplus: Increased to 2% of GDP from 0.7% in 2016, driven by stronger oil exports and subdued imports.
• Foreign Exchange Liquidity: Improved significantly, with external reserves reaching a four-year high by the end of 2017 and further increasing by end-March 2018.
• Exchange Rate: The official rate remained at 305 Naira per USD, while the parallel rate was 20% higher (around 360 Naira per USD) and aligned with the IEFX window.
• Foreign Investment: Foreign Portfolio Investment (FPI) resumed due to the opening of the IFEX window and high government debt yields, but Foreign Direct Investment (FDI) remained low.

Monetary Policy and Inflation

• Monetary Tightening: The CBN significantly reduced liquidity and maintained exchange rate stability.
• Inflation: Remained high at 14.5% in 2018, with food inflation being particularly elevated, driven by farmer-herdsmen conflicts and displacement in the North-East.
• Broad Money Growth: Declined to 2% in 2017 from 18% in 2016.

Fiscal Situation

• Fiscal Deficits: Remained high, with FGN deficit estimated at 3% of GDP in 2018.
• Federation Revenues: Only 53% and 65% of budgeted oil and non-oil revenues were realized in 2017.
• Debt Service: Burdened the budget, with interest payments accounting for 70% of FGN revenue.
• Debt Composition: FGN debt stock was 19.1% of GDP, with a rebalancing toward external and long-term debt to reduce borrowing costs.

Economic Outlook

• Growth Recovery: Expected to be slow and oil sector-driven, with GDP growth likely to hover just over 2%.
• Non-oil Sectors: Expected to grow only slowly due to weak consumer and investment demand.
• Fiscal Pressures: Will remain high as revenue shortfalls continue, and the 2018 budget has less realistic revenue targets than 2017.
• Monetary Policy: Will continue to target exchange rate stability, with a possible consolidation of forex windows.
• Current Account Balance: Expected to slowly decrease as imports recover and financial inflows slow.
• Inflation: Likely to remain in double digits, with increased recurrent spending before the 2019 elections potentially adding to inflationary pressures.

Special Topic: Connecting to Compete

• Regional Connections: A key factor in promoting diversification and long-term inclusive growth.
• Spatial Integration: Needed to create a nationally integrated market and attract private investment.
• Infrastructure: Limited connective infrastructure hinders spatial economic integration and scale economies.
• Transport Costs: High domestic transport costs limit diversification and economic integration.
• Welfare Impact: A 10% reduction in transport costs in rural areas could increase welfare by 13%.
• Inter-Regional Corridors: Improvements in corridors like LAKAJI are expected to yield annual benefits of over $1.34 billion.
• Regional Priorities: Policy and investment should be regionally differentiated to leverage development potential.
• Industrial Parks: States have set up industrial parks, but infrastructure gaps remain, especially in roads, power, and water.
• Coordination: Needed to enhance inter-governmental coordination and leverage regional collaboration for scale and specialization benefits.

Key Data Indicators

Main Views and Key Information

• Growth Recovery: Slow and oil-dependent, with non-oil sectors underperforming.
• Fiscal Challenges: Revenue shortfalls and high deficits persist, with the 2018 budget having less realistic targets.
• Monetary Policy: Targets exchange rate stability, with the IEFX window playing a central role.
• Inflation: Remains high, with food inflation being a major contributor.
• Regional Integration: Crucial for long-term growth and competitiveness, especially through inter-regional corridors and spatially targeted investments.
• Transport Costs: High and a barrier to economic integration and productivity.
• Infrastructure Gaps: Limit firms' ability to access wider markets, affecting scale economies and agglomeration.
• Spatial Equity vs. Efficiency: Trade-offs exist, with rural connectivity yielding higher local welfare gains, while inter-city corridors offer higher aggregate efficiency.
• Industrial Parks: Need better infrastructure and intergovernmental coordination to realize their potential.
• Policy Priorities: Should focus on agglomeration, backward and forward linkages, and land management in urban nodes and growth corridors.

Conclusion

The report emphasizes the importance of regional coordination and infrastructure improvements for Nigeria's long-term economic growth and competitiveness. While the economy has shown signs of recovery, structural reforms are still in early stages, and fiscal and monetary challenges remain. Spatial integration is highlighted as a key strategy to enhance productivity, private investment, and welfare, with inter-regional corridors and rural connectivity being particularly important. Policymakers are advised to prioritize investments that support scale economies, agglomeration, and efficient regional coordination.