Insecurity, Graft: Nigeria’s Economy May Remain Low for 10 yrs—Report
Citing insecurity, corruption and low good governance indices, Nigeria’s economy may remain low and is not likely to do better than it did in the last decade for ten years from today, a 2020 Fitch Country Risk Analysis for Nigeria has indicated.
The report, recently published says Nigeria’s economy remains strongly-tied to the performance of the oil sector and overall economic activity is unlikely to “reach levels seen over the past decade”, on the back of weak oil-driven growth, limited reform momentum and sluggish non-oil sector activity.
It noted that businesses operating in Nigeria face heightened security costs, an uncertain regulatory environment, limited labour and capital mobility and uncompetitive import conditions.
“Nigeria’s non-oil sector growth potential remains constrained by the acute shortcomings in the country’s utilities and transport sectors, high levels of social instability in the restive regions of the country, unorthodox trade and monetary policies and strained foreign currency availability.
“Rampant criminal activity and recurrent militant attacks on critical infrastructure – particularly in the Niger Delta – threaten the safety of foreign workers, business operations and wider economic stability due to the economy’s fundamental reliance on oil revenues. Cyclical security risk flashpoints also disrupt the country’s predominantly gas-reliant power supply and limits freight transit routes.
“Meanwhile, smuggling across the country’s porous borders, excessive red tape surrounding trade and investment, unorthodox foreign currency regimes and pervasive corruption further cloud the ease of doing business, thereby raising legal costs and deterring investment.
“Over the longer term, the country has potential to capitalise on its resource wealth, strategic position and large population if it can successfully complete planned energy and transport infrastructure development projects and implement structural reforms aimed at boosting market liberalisation and economic diversification, however slow reform momentum under Buhari’s tenure and political risks will preclude rapid improvements in in the business environment in the quarters ahead”, said the report.
The report includes: Fitch Solution’s Core Views, 10-year Forecasts, Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections.