Delayed stimulus package, budget squabbles, lower oil output and foreign exchange strictures have taken their toll on Nigeria’s annual GDP which contracted -1.51%. The Q4’16 GDP numbers were better than expected at -1.3%.

Going forward, we expect forex rate convergence, power output increase, targeted government spending and social intervention to have an impact on Q1/Q2’17 GDP growth. The next MPC meeting in March could see the CBN take a more decisive step towards an accommodative stance following an improved (although still negative) GDP growth rate and a possible decline in headline inflation.