Macro Forum: The Street View


The Nigerian economy is projected to gather pace throughout 2020, with stronger consumption largely due to the full implementation of a 60% minimum wage increase, alongside stable oil production and prices. Fiscal policy is expected to add to growth, with the government passing a record NGN 10.3 trillion (c.US$28 billion) 2020 budget in December. At its first meeting of the year in January, the Central Bank of Nigeria (CBN) decided to hold interest rates at 13.5% despite inflation reaching a 20-month high of 12.0%, due to food price rises following the closing of land borders in August 2019. The CBN is seeking to manage inflation by increasing loan-to-deposit ratios, citing the importance of not adding pressure to consumers. The medium-term outlook remains relatively fragile, with high unemployment, double digit inflation, and a return to international capital markets to finance the 2020 budget, expected to be focus areas for foreign direct investors. 







Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
GDP* 2.12% 2.28% 2.55% 1.87%
Inflation* 11.22% 11.24% 11.98% 12.26%

* Year on Year



Real GDP Growth

Source: International Monetary Fund

Nigeria FX vs FV

Source: Bloomberg Spot Price and Actis methodology for Fundamental Value


Source: International Monetary Fund