Dear Subscriber,

With approximately 51 weeks to the next general elections, emphasis is shifting as fast as loyalty. In spite of the Omicron waves, political maneuvering continues with unparalleled intensity. In the words of John Steinbeck, “power does not corrupt, fear corrupts… perhaps and more importantly, the fear of a loss of power”.

Economic policy vagueness and regulatory autocracy has plagued the Nigerian economy for most of 2021. It was a year best described as “in like a lion, and out like a lamb”. But in reality, it was almost the opposite because of mixed signals.

The economic growth maintained a slow and steady path as was expected but could be threatened by a rude interruption of the Omicron variant and the specter of precision lockdowns. This notwithstanding, Nigerians are still frustrated with data that shows falling inflation in an environment of higher prices.

In this Christmas edition, we attempt extrapolating possible exchange rate scenarios based on oil price sensitivity, giving us an external boundary of N610/$ and an optimistic scenario of N530/$.

Some of the economic imponderables are becoming clearer. Just as the US fed is now determined to increase interest rates three times in 2022 and the Bank of England has pushed up its policy rate to 0.25% pa. The implication of higher dollar interest rates is an excruciating external debt service burden for Nigeria, compounded by the subsidy overhang.

Lagosians are spending approximately 1,080 hours a year in traffic, compared to 148 hours in London, the city with the worst traffic jams in the world (excluding Nigeria and Egypt). This comes to 12.5% of the time in a year. It also translates to 6.76 years in a life expectancy of 55 years.

In this edition of the LBS breakfast at dinner time edition, Bismarck Rewane and the FDC think Tank analyze the happenings of 2021 and the economic outlook for 2022.

Merry Christmas and a happy and prosperous 2022!!!