With the elections over and the petition tribunals getting busy, the big issue facing investors is where is the growth going to come from, where are the jobs and what is going to happen to inflation.
The current level of investment is suboptimal and incapable of providing Nigeria with the investment impetus that will have the desired multiplier effect on output. Nigeria needs to raise the level of investment from 14.1% of GDP to a minimum of 25% of GDP ($118bn). This will require a structure that considerably incentivises private investment.
In the agriculture sector, which grew by 2.46% in Q4’18, sugar consumption has come under increased focus in recent years. A growing health consciousness has identified sugar as a causative factor in diseases such as diabetes and obesity. A softening global and domestic consumer market threatens to further derail Nigeria’s sugar output. This accounts for only 7% of domestic demand leaving a supply gap of 93%. However, the growing demand of bio-fuels such as ethanol in the transportation industry presents sugar producers with an added incentive to boost production.
As the president begins the process of calibrating his new economic strategy, investors are watching carefully to see if he can keep to his electoral promises and be more effective in 2019/20
In this edition of the FDC Monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.
Enjoy your read.