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Published On: Thu, Jan 15th, 2015

10 key numbers to shape Nigeria’s economy in 2015

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By Aminu Imam with agency report

For more than four years, the Nigerian economy has expanded by an average of 6 percent, despite a home grown banking crisis, global economic collapse, insecurity, energy shortages and lack of movement on important reforms such as the deregulation of the downstream oil sector.

Below is a list of ten other noteworthy numbers (apart from the average 6 percent growth rate) the direction of which will shed light on where Africa’s largest economy is headed in 2015.

200: Naira to the dollar

he strength or weakness of the Nigerian currency is an indicator that affects everyone from real sector manufacturers to offshore carry trade investors looking to buy or sell naira denominated assets.

The Nigerian currency has been selling off versus the dollar since the retreat in oil prices began in mid – June 2014. This forced the CBN Governor Emefiele to devalue the currency by eight percent in November and widen its target trading band to N160-176 against the dollar, although the new level has been breached on the interbank FX market, given dwindling state oil revenues and declining reserves.

“We think an adjustment of the midpoint of the official rate, to NGN200/$1, (from 155 pre-oil price drop and 168 today) implying an overall devaluation of c. 30 percent is probable in the short term.

This could happen as soon as the 20 January MPC meeting,” said Renaissance Capital SSA Economist, Yvone Mhango, in a Jan 08 note.

Any breach of the N200 level will accelerate negative positioning and sentiment against the naira, as well as increase inflation due to Nigeria’s import dependent nature, analysts have stated.


Nigeria’s gross Foreign Exchange (FX) reserves stood at $34.4 billion as at 12 January 2015, and is down nearly 20 percent from a year ago.

The CBN has burnt through reserves as it struggles to defend the currency and analysts believe the $30 billion level is a line in the sand, below which investors will lose confidence in the CBNs ability to defend the currency.

For stark comparisons, at the beginning of the 2008 global Financial Crises, Nigeria had FX reserves of nearly $60 bn, while its economy was half the size it is today.


The Nigerian Stock Exchange (NSE) All-Share Index (ASI) has lost nearly N4 trillion in market capitalisation since the sell-off in equities began last June.

The NSE – ASI closed trading on Tuesday 29,889 points and is down 13.76 percent already this year.

A look at its chart and technical analysis of the index shows there may be more sell –off to come, with the 20,000 points level showing up as the next major support level for the index.


During the 2008 financial crises oil prices collapsed from $141 – $39 per barrel in a 6 months period. After which Brent began a gradual climb back to the $100 levels.

Saudi – Arabia, a major player in OPEC has signalled its intention to not cut output to support prices, even if oil hits $20.

Analysts say traders and Nigerian government officials will be watching the $39 mark (where oil bottomed in February 2009) to see if it signals a new bottom for the current shale induced sell-off.

Goldman Sachs reduced its six and 12-month Brent predictions to $43 a barrel and $70, according to a report released Monday.

“To keep all capital sidelined and curtail investment in shale until the market has re-balanced, we believe prices need to stay lower for longer,” Goldman analysts said in the report.

18 %

The Debt Management Office (DMO) sold bonds to fund the government deficit at an average of 13 percent last year.

Analysts believe investors will demand higher yields from the DMO of up to 18 percent, to hold FGN bonds this year.

“The significant back-up in yields in the Nigerian fixed income market is a function of the lower oil price and recent capital flight, but in a sense, it also mirrors the lack of fiscal savings in the country,” Samir Gadio, Head of Africa Strategy, FICC Research at Standard Chartered Bank have said.

The DMO has released its provisional issuance calendar for Q1 2015, and seeks to raise (gross) between N215bn (US$1.17bn) and N305bn (US$1.66bn).

The FGN’s budget proposals project a deficit of N755bn for this year, and a contribution from net domestic borrowing of N570bn.

52 %

In the 2011 presidential elections, the incumbent PDP presidential candidate won 58.8 percent of the votes cast to emerge winner.

This year’s contest will be a much tighter race and will see anyone able to muster 52 percent of the votes doing just enough to squeeze through as winner, a political analyst speaking anonymously, has said.

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