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Nigeria Spotlight

Eagle-eyed statisticians. It is hard to accuse Nigeria's National Bureau of Statistics of glibly glazing over the details. While its counterparts the world over are generally only brave enough to report their key economic indicators to a single decimal place (for example, the UK's Office for National Statistics concluded earlier this week that headline inflation had risen by 2.7% in April), such broad-brush strokes cut little ice at the NBS who insist, for the most part, on reporting to two decimal places.

Inflation is down. Apparently. Consequently, its assertion that headline inflation had fallen from 17.26% in March to 17.24% in April allowed the Buhari administration to crow about three consecutive months of slowing overall price rises as a sign that the economy is on the mend. Whether local shoppers noticed a 0.02 percentage point decline remains an open question. In any case, the government was less assertive in noting that food price inflation has been rising steadily for well over a year and increased again in April to 19.30%.

Positive GDP news next? So, after the 1.5% shrinkage of the economy in 2016, hopes are high that next week's scheduled Q1 GDP figures will see a return to positive economic growth. Certainly, business sentiment, which normally leads movements in GDP, has turned north since last summer and some indicators are consistent with output rising by around 0.3% y/y in the first quarter of this year.

Central Bank of Nostalgia. However, much of the recent upswing in sentiment probably reflects a relief surge following the relaxation, albeit somewhat haphazardly, of the onerous restrictions on acquiring foreign exchange, chiefly US dollars. Sentiment has also been boosted by the rebound in oil output alongside signs that prices have stabilised around $50 per barrel. The upshot is that while the overall growth figures can reasonably be expected to improve on the -1,.30% seen in Q4, a climb into positive territory looks unlikely until Q2/Q3. More fundamentally, the objective of a return to an economy throttling along at the 7% y/y seen in the decade before oil prices slumped looks some way in the distance.

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