Entries for 'Nigeria'

COVID-19 has exacerbated existing external pressures on Nigeria. Despite external support, we expect reserve losses of $8 bn in 2020. The c/a deficit remains significant in the context of low oil prices. At the same time, global risk-off behavior weighs on capital flows. Debt amortization and large fiscal deficits increase financing needs.

COVID-19 is exacerbating existing vulnerabilities in Sub-Saharan Africa. The global recession and drop in commodity prices hit the region hard. We present a framework to summarize SSA’s exposure to different risks. Multilaterals need to play an important role in the region going forward.

Growth across Sub-Saharan Africa is expected to slow down markedly. This is a result of lower global demand and falling commodity prices. Lower growth will inhibit advances in living standards across the region. We are concerned that COVID-19 outbreaks in SSA could be disastrous. Multilateral support, including from the IMF, is needed going forward.

Nigeria is increasingly reliant on expensive “hot money” flows. Non-residents are flocking to central bank auctions of CBN bills. Nigeria leads the region in Eurobond issuance, at a high cost. With non-oil revenue below 4% of GDP, risk of crowding out is high. Weak oil production and low prices weigh on the current account.