Nigerian economy glimpses dim light at end of tunnel

LAGOS: Suffering from rampant inflation, stalled investment and mass layoffs, Nigeria is still gripped by one of the worst economic crises in its history.

But for the first time in months, the West African economic giant is finally looking to exit its first recession in decades.

On Thursday, parliament approved the government’s ambitious seven-trillion-naira ( US$ 23billion) budget to “pull the economy out of recession as quickly as possible”.

The plan, bolstered by improved output in oil production and a potential billion- dollar World Bank loan, aims to kick- start growth through rail, ports and power projects.

In January, the International Monetary Fund ( IMF) said it expected Nigerian growth to hit 0.8 per cent for 2017 and 2.8 per cent in 2018. Others are more optimistic. “Growth of two per cent (in 2017) is totally possible,” said Moody’s analyst Aurelien Mali at the ratings agency’s annual West Africa conference in Lagos.

“Import figures suggest that after declining for two years, domestic demand picked up at the turn of the year,” John Ashbourne, economist at Capital Economics, said in a recent note.

Ashbourne added that there were also encouraging “signs of life in Nigeria’s non- oil sector”.

The new figures are far from the boom time in Nigeria, which over the past decade had enjoyed average annual growth of eight per cent, according to Bloomberg.

“Compared to other oil powers like Qatar, Nigeria didn’t prepare for rainy days,” said Douglas Rowlings, an analyst with Moody’s.

Saving for a worldwide crash in commodity prices wasn’t under the control of President Muhammadu Buhari, who only came into power in 2015.

But his tough talk towards rebel groups in the Niger Delta only served to deepen the recession, said emerging market analysis firm BMI Research. — AFP