Nigerian Economy: Macroeconomic Analysis
Indian School of Business
Contents Economic Overview 3 Gross Domestic Product (GDP) 3 GDP Composition 4 Inflation 4 Shadow Economy 5 Trade Overview 5 Foreign Debt 7 Labor Market & Human Capital 7 Population and Income Inequality 8 Unemployment 9 Currency 10 Money Supply and Monetary Control 10 Fiscal policy 12 Exchange rates 12 Interest Rates 13 Foreign Direct Investment 14 Globalization and Comparative Advantage 14 Conclusion 15 References 16
Nigeria's economy is estimated to be worth about $262bn, making it one of the largest economies in Africa. The estimates and analysis of various indicators is discussed in the later sections. The country has …show more content…
However, from the recent trends it appears that Nigeria will be able to sustain a year-on-year budget deficit of 2% given the prices of oil remain stable even though the current European turmoil and a slowdown in china can push oil prices down and lead to further increase in Nigeria’s Fiscal deficit. Nigeria intends borrowing from the international capital market for meeting its capital expenditure requirement in the near future.
The total value of Nigeria's exports in the first quarter of 2012 is at about USD 30 billion, the exports to India has reached USD 4.2 billion, compared to USD 3.7 billion credited to the US in the period under review. Nigeria's export to India is mostly crude oil and cashew nuts while India exports pharmaceutical goods, machinery, electronics and rice. The US was trailed by the Netherlands with USD 2.9 billion, followed by Spain with USD 2.4 billion and Brazil which recorded USD 2 billion.
Nigeria is a member of the WTO and does not impose permanent import restrictions however it has a huge banned list of import goods which coupled with ad valorem tariffs have given rise to increase in smuggled goods. As such the restrictions do not seem to have benefited the local industries. There are specially designated export processing zones which provide benefits from tax, duties, foreign exchange restrictions and import-export restrictions. The Nigerian Export Credit Guarantee and insurance corporation