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FITCH predicts growth for Nigeria’s economy in 2018

Fitch Ratings, an international rating agency, has predicted that Nigeria’s economy will grow in 2018 by 2.6 per cent.
The rating agency said that the country is not expected to experience another economic recession this year , 2018.

The United Kingdom-based rating agency’s projection is a bit higher than the 2.1 per cent growth projected by the International Monetary Fund, IMF and the World Bank’s projection of 1 per cent growth in 2018. In its latest full report on Nigeria, Fitch said a revival of economic growth by the sustained implementation of coherent macroeconomic policies could lead to a positive rating for Nigeria while a failure to realise an improvement in the economic growth would be negative for the country.

“Fitch Ratings forecasts growth of 2.6 per cent in 2018,” the spokesperson for Fitch, Peter Fitzpatrick, said. “The recovery will be driven mainly by increased FX (foreign exchange) availability to the non-oil economy and fiscal stimulus, as higher oil revenue and various funding initiatives have raised the government’s ability to execute capital spending plans.”

Fitzpatrick, however, noted that the growth forecast was subject to downside risks, as the foreign exchange market “remains far from being fully transparent and domestic liquidity has also become a constraint.”

On Nigeria’s public finances, Fitch pointed out that the failure of the Federal Government to narrow the fiscal deficit, leading to a marked increase in public debt, would be negative for the government.

Therefore, Fitch said it expected higher revenues to drive a narrowing of the general government deficit to 3.4 per cent in 2018 as oil production rises and the overall economy recovers. Fitch said,

“The gross General Government Debt, GGGD, will continue to rise to 29 per cent of GDP in 2026 saying that the main risk to debt sustainability would be a failure to reduce the primary budget deficit, which could bring the debt level to 45 per cent of GDP over the same period.

On the impact that a delay in approval of the 2018 appropriation bill will have on the economy in the 2018, Fitch said,   “The government has again faced delays in getting parliamentary approval for the budget, with much of the delay coming from legislators seeking more spending in their respective states.”

About Lanre Oyetade

A multiple award winner in Economics and business journalism, Lanre Oyetade has served close to two decades in the media industry, spanning different notable stables, where he is privileged to have risen to the position of a title editor. A masters degree holder in Economics from the University of Lagos and doctoral student at the Babcock University, he is a winner of the prestigious NMMA Capital Market Award for two consecutive years (2004 & 2005), and was also a nominee for the body’s banking and finance and money market awards for two years. In 2013, he also won the Most Outstanding Business-Reporting Title Editor award of the National Institute of Marketing of Nigeria (NIMN). A minister in the LORDS’s vineyard, he has been an inspirational speaker and resource person at many corporate and religious fora since early 2004, and has so far authored three books on the capital market; on personal effectiveness, and on personal finance, in 2008 and 2014, respectively.