Although there has been a recent increase in cooperation between Nigeria’s northern communities and federal security forces to fight extremism, economic and social disparities between northern and southern states have yet to show signs of closing, according to a report of the UK-based Business Monitor International (BMI).
“Our core scenario is that while headwinds will persist, growth will pick up slightly in 2013 compared to 2012,” BMI said in its Business Forecast Report on Nigeria, made available to PANA here Monday.
“This report reveals how we see the next five years playing out in the country amidst the government’s efforts to diversify the economy and transform the public sector in the region,” Terence Alexander, BMI’s Head of Research, explained in an accompanying note.
The performance of Nigeria’s export sector, and the wider economy, the report said, “will depend on the success of the government’s efforts to address security risks on a number of fronts.”
But as a key risk to the outlook, BMI cautioned that the volatility of the price of oil posed a significant hazard to export revenues and government receipts.
“A significant deterioration in the economies of Europe, the US, or other major markets could see the price again head below our current projections, with negative implications for Nigeria’s economy.
“While we believe that security risks will eventually be contained, if the situation significantly deteriorates, this would potentially affect investment, exports, and growth,” said the report.
BMI said it had made a slight downward adjustment to its current account forecast based on revisions to the Central Bank of Nigeria’s historical data and the most recent figures released for the first quarter of 2013.
“We are projecting a surplus of 7.6 percent of GDP in 2013, compared to our earlier estimate of 8.4 percent,” the report added.