06 August 2018 ( Lagos ): The World Bank recently reiterated its 2.0% y/y real GDP growth expectation for Nigeria in 2018 (IMF: 2.1% y/y; Vetiva: 1.9% y/y) - an improvement from the 0.83% recorded in 2017 - backed by healthy oil prices. However, the Bank highlighted an over-reliance on oil and a struggling power sector as impediments to long-term growth, indicating the importance of further economic and fiscal diversification in order to unlock Nigeria’s growth potential. 

Furthermore, despite Nigeria’s debt-GDP ratio of 20% still below the 56% threshold for its peers, the Bank once again warned about the dangers of high debt servicing costs. Analysts note that the government’s shift to external borrowing is aimed at addressing the high cost of borrowing in the local markets, although it introduces another debt danger in the event of material currency depreciation. 

Reporting for EasyKobo on Monday ,06 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited