This document will discuss economic concerns of Nigeria. Specially addressed will be the following: Nigeria’s economic outlook, gross domestic product, inflation, and deprecation of the naira. This paper will conclude with a summary of this discussion.
Nigeria Economic Outlook
Nigeria’s parliament approved the 2017 budget in May. The economy falling from low oil prices, which have led to recession, a plummeting naira and a spike in inflation, the budget aims to jumpstart growth by ramping up capital spending on roads, rail, ports and power. The significant fiscal shortfall is set to be plugged by a mixture of loans and bonds, although with foreign investors skittish, the government may have to turn to more domestic financing, …show more content…
Clearly a lot needs to be done to make tax compliance less onerous for the average taxpayer.
Nigeria's consumer prices increased 17.24 percent year-on-year in April of 2017, easing slightly from a 17.26 percent rise in the prior month. The inflation rate fell for the third straight month to the lowest in nine months, led by a slowdown in prices of housing and utilities and transport (Wilson, David, Inyiama, & Beatrice, 2014). annual core inflation rate was 14.75 percent, the lowest since April last year. On a monthly basis, consumer prices increased 1.60 percent. Inflation Rate in Nigeria averaged 12.38 percent from 1996 until 2017, reaching an all-time high of 47.56 percent in January of 1996 and a record low of -2.49 percent in January of 2000. Compared to April of 2016, prices went up at a slower pace for housing and utilities (16.05 percent vs 18.85 percent) and transport (14.91 percent vs 15.43 percent). Meanwhile, cost rose faster for food (19.30 percent vs 18.44 percent), including bread ,cereals, meat, fish, potatoes, yams and other tubes, coffee, tea and cocoa, milk cheese, eggs, oils and fats. Yet, food inflation hit the highest since February of 2009. Also, prices advanced for clothing and footwear (17.10 percent vs 16.65 percent), furniture and household equipment (12.84 percent vs 12.47 percent), health (10.66 percent
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It is said that this year alone, because of the El Nino weather pattern and the devastation it has cause throughout the country, the food price inflation will only keep rising and on many different items we have to eat every day. To name a few, eggs are expected to rise 2%, fruit and nuts 4.5%, vegetables 4%, and meats 4.5% (CBC News, 2015). It is clear, and the one thing we know for sure is how much more money that will go into purchasing foods and how much less money will be in our wallets.
In every country of the world, exchange rate level is the paramount target of economic policy targeting. In other words, exchange rate policy should be geared towards the attainment of long-term equilibrium rate, so as to achieve certain macro-economic objectives e.g. balance of payments equilibrium, through proper management of the Nigerian exchange rate policy. The country started operating the floating exchange rate system in 1986 after the introduction of SAP. It was expected that the country experience development but the reverse was the case because the country suffered consistent hopeless development situation as her naira depreciates often against other foreign currencies, especially the dollars which was universally accepted as the global medium of exchange. Before the floating system was introduced, $1=NO.89 but after that in 1966 we have $1=N22.05 and even today we have $1=N150.7 .This is quite disheartening, regardless of the effort of the government of Nigeria through the activities of the regulatory body such as the establishment of second tier foreign exchange market (SFEM) in 1986 and interbank foreign exchange market (IFEM) in 1989 and currently the foreign exchange market (AFEM) in 1995.
Nigeria has become the fastest growing country in Africa, its coastal ports are the heart and soul of its economy. Since its creation by the British Empire, there has been a civil breakdown and conflict among its tribal leaders. However, their religious understanding between Islam and Christianity has kept them at peace amidst themselves throughout time. The last few years, the government has developed itself into a functioning federation, the people are able to notice how outside influence has improved their daily lives.
Before we begin, let’s take a look at the country and its environs. Nigeria a former British Colony, located in the western part of Africa, it shares borders with Benin, Cameroun, and Niger. A growing population of 150million, labour force of 51million (70% Agriculture, 10% industry and 20% service), urbanisation is less than 40%, GDP is over $300billion, Per capita income is $2300. Nigeria is blessed with different cultures, languages and ethnic groups (252 in total); this was due to the colonization of the British in the early 19th century (Columbia Encyclopaedia). The British amalgamated its protectorates in 1914 to enable stable control and governance which made them create one Nation of Nigeria formed from all the groups, community and empires around the Niger area under their control. Nigeria had her independence on the 1st of October 1960 and since then various civil wars, political and religious unrest in the country to share power and resources amicably.
The excess of modern sector profits over wages and hence investments in the modern sector continued to expand and generate further economic growth on the assumption that all profits would be reinvested. Both labour transfer and modern sector employment growth were in turn brought about by output expansion in that sector. This process of modern sector self-sustaining growth and employment expansion facilitated the structural transformation from a traditional subsistence economy to a more modern developed economy to take place (Asodike, 2008).
It is no secret that much of the world has been concerned over the course of the past century with the amount of poverty that is existent in various parts of the globe, and how the rate of poverty seems to only be increasing. Consider the abject poverty and poor economic infrastructure that has been endemic to the countries of Africa for all of the modern era. According to Ana (2007) one of the primary reasons limiting economic expansion in countries such as Nigeria is that basic lack of access to financial capital that is necessary to usher in an era of expansion and prosperity.
Nigeria’s construction industry found its feet in the first quarter of 2017 snapping out of six straight quarters of negative growth. The sector recorded a 0.15% increase in GDP and contributed 4.17% to total real GDP. Its performance, however, didn’t stop the economy from contracting for a fifth consecutive quarter.
In Nigeria today, a number of banks wanting to merge may run into difficulties, because most Nigeria banks are not quoted on the stock exchange and the assets of some are really bad. The effect of the merger is that merging banks in the country, under the current dispensation may lose their licenses and be issued new ones to reflect the new consolidated outfit. As we go on in the subsequent chapters, further critical look shall be taken on the effect that this development is likely to or will have on the Nigeria banking industry and the economy at large.
The Federal Republic of Nigeria, Africa’s most populous country is in the West African sub-region, bordered by Niger in the north, Chad in the northeast, Cameroon in the east, and Benin in the west. Nigeria uses the presidential system of government and her currency is the Naira. Nigeria currently has 36 states with a Federal Capital Territory and a population of over 160 million people. Of this population, approximately 30 million are stu
SOLUDO.C (2004: 4) The Nigerian banking system has undergone remarkable changes over the years, in terms of the number of institutions, ownership structure, as well as depth and breadth of operations. These changes have been influenced largely by challenges posed by deregulation of the financial sector, globalization of operations, technological innovations and adoption of supervisory and prudential requirements that conform to international standards. It is widely believed that savings and investment must go hand in hand for
This is an external factor of Nigeria’s underdevelopment; it is the highest form of exploitation from the British countries to their colonies after independence. Nigeria has contributed to its economic backwardness, as it “promotes the maintenance of foreign domination and enhances neo-colonialism and the flowering of subjugationism” (onimode, 1981). Imperialism has always been an exploitative phenomenon, which was the initial motive for colonization. Nigeria has been seen as a dumping ground for most British counties, making it difficult for us to produce our own goods. Also the fact that we are primary producers with fewer technicalities to produce our raw materials into finished products makes it a means of imperialism as we export our goods at the rate determined by the British colonies and still import back at a higher cost. For example the crude oil, Nigeria is the largest country with the crude oil but the poorest in economic state due lack of technicality in transforming crude oil into petrol which led to the issue of sucidy removal in January 1st 2012, even after which things haven’t changed as fuel scarcity hits most part of the country e.g. Abuja, Lagos etc. as at 19th September 2012.
Nigeria and indeed almost all the African countries are now facing an unprecedented debt crisis never known in the history of the continent. The rationale for raising external loan has always been to bridge the domestic resource gap in order to accelerate economic development. This is because nations just like individuals need loans to augment domestic resources. Nigeria decides to borrow in order to finance specific projects. As at today, Nigeria Local and international debt stands at US $60 billion according to The Vice President Yemi Osinbajo. Nigeria debt did not just happen overnight because during some of the successive governments and administration since Nigeria independent from the periods of General Obasanjo’s regime (1976-1979) till Babangida and Abacha regimes (1985-1998), surprisingly, caused the nation’s ‘boast’ to begin to fade. Then, it was discovered that to keep moving, Nigeria had to take foreign loans. In no time, Nigeria was caught up in a crippling foreign debt crisis that besides compromising its economic progress, political stability, social dignity and cultural integrity, also dealt a debilitating blow to the Nigerian masses. Because of the pains and sufferings they inflicted as a result of implementation of the World Bank IMF policies.
AN APPARAISAL OF THE EFFECT OF INFLATION ON THE DELIVERY OF CONSTRUCTION PROJECT IN NIGERIA.
Nigeria is one of those countries in Africa that is fairly rich with natural resources. For example Crude Oil, Coal, Iron, forest, farming, Fishing and so on. It is believed that natural resources development is one of the factors that help the country in some many areas like employment opportunities, economy and so on.