In spite of being blighted by soaring debt service and constrained by negative labour productivity, the Nigerian economy is likely to turn the corner in 2019.
This is because policy makers are set to make major fiscal adjustments to address the imbalances and revenue shortfall. We believe that the Buhari team in 2019 will take advantage of higher oil prices and a new election mandate to make some urgently needed decisions.
The 67% increase in the national minimum wage to N30, 000 will allow the FGN to become fully compliant with all of the obligations associated with public service compensation.
The 2019 budget is expected to be approved in April to be followed by major capex disbursements. The increased investments in infrastructure and its multiplier effect should boost aggregate output. The IMF is projecting 2.1% growth in 2019 but has warned about the fragile revenue profile and the vulnerability of the economy to shocks.
In this edition of the LBS Breakfast Session, Bismarck Rewane and the FDC Think Tank addresses Nigeria’s delicate fiscal position and the impact of these developments on your business, portfolio and strategy.