Nigeria Outlook 2013
Quarterly update – December 2013
Final analysis by Nenad Pacek
Business and economic outlook
Nigeria
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Executive summary
Facts
Economic fundamentals
Strategic business importance
Corporate sales and profit trends
Growth trends and drivers
Household consumption trends
Gross fixed investment trends
Government spending trends
Currency outlook
Interest rates and inflation outlook
Political risks to be aware of
Forecast table
Contents
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Almost 80% of companies managed to grow sales in 2010/2011/2012 and this number has dropped to 77% in 2013 amid rising competition
This makes Nigeria one of the most consistent and one of the strongest performers for corporate sales in MEA and in emerging markets
Over 50% of companies are growing in double digits, stronger than they anticipated
Expectations for 2014 are mildly stronger – 84% of companies expect sales growth and half expect to grow in very solid double digits
Competitive pressures will continue to increase and affect margins as companies heavily prioritize Nigeria for emerging markets/Africa expansion
Real GDP grew 6.6% last year and it will reach 6.6% in 2013 (there is a small upside)
Our central scenario is growth of 6.7% in 2014 and 6.5% in 2015 (oil price is a risk though)
Growth will be mainly driven by non-oil sectors while oil production continues to struggle due to significant organized oil theft and resulting lower production
In 2014 household spending will grow by 8%, corporate investment spending by 7%, government spending by under 8% and exports by 2.5%
Inflation has slipped to single digits (7.8% yoy) and it will average 8.9% this year and
9.2% next year as spending increases prior to 2015 elections
Executive summary I
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The budget for next year was drafted but governors are demanding changes and more spending – as usual the budget
Final analysis by Nenad Pacek
Business and economic outlook
Nigeria
•
•
•
•
•
•
•
•
•
•
•
•
•
Executive summary
Facts
Economic fundamentals
Strategic business importance
Corporate sales and profit trends
Growth trends and drivers
Household consumption trends
Gross fixed investment trends
Government spending trends
Currency outlook
Interest rates and inflation outlook
Political risks to be aware of
Forecast table
Contents
•
•
•
•
•
•
•
•
•
•
Almost 80% of companies managed to grow sales in 2010/2011/2012 and this number has dropped to 77% in 2013 amid rising competition
This makes Nigeria one of the most consistent and one of the strongest performers for corporate sales in MEA and in emerging markets
Over 50% of companies are growing in double digits, stronger than they anticipated
Expectations for 2014 are mildly stronger – 84% of companies expect sales growth and half expect to grow in very solid double digits
Competitive pressures will continue to increase and affect margins as companies heavily prioritize Nigeria for emerging markets/Africa expansion
Real GDP grew 6.6% last year and it will reach 6.6% in 2013 (there is a small upside)
Our central scenario is growth of 6.7% in 2014 and 6.5% in 2015 (oil price is a risk though)
Growth will be mainly driven by non-oil sectors while oil production continues to struggle due to significant organized oil theft and resulting lower production
In 2014 household spending will grow by 8%, corporate investment spending by 7%, government spending by under 8% and exports by 2.5%
Inflation has slipped to single digits (7.8% yoy) and it will average 8.9% this year and
9.2% next year as spending increases prior to 2015 elections
Executive summary I
•
•
•
•
•
•
•
•
•
•
The budget for next year was drafted but governors are demanding changes and more spending – as usual the budget