The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
On January 1st 2012 in an attempt to lower pervasive corruption, the Nigerian government abruptly repealed its cap on petrol prices. Overnight, oil prices doubled from NGN65 to NGN140 per litre, leading to outcry by the Nigerian population as transport and food prices climbed abruptly, affecting incomes significantly. National strikes began on the 9th January and evolved into protests against endemic corruption, leading to the return of a smaller fuel subsidy.
Source: Euromonitor International from Transparency International, World Economic Forum
Note: CN = China, IN = India, JP = Japan, AR = Argentina, BR = Brazil, OO = Cameroon, GH = Ghana, KY = Kenya, NG = Nigeria, SA = Saudi Arabia, ZA = South Africa, TU = Tunisia, US = United States, GB = United Kingdom. The Global Competitiveness Index measures the microeconomic and macroeconomic foundations of national competitiveness, taking into account 12 subjects. The score is from 1 to 7 with 7 indicating a very competitive economic environment. The index ranked 142 countries worldwide in 2011. Transparency International’s Corruption Perceptions Index is the main tool used for measuring a country’s perceived levels of corruption in the public sector. A score of 10.0 indicates a very clean economy, while 0.0 denotes very high corruption levels. The index ranked 183 economies in 2011, as determined by expert assessments and opinion surveys.
Source: Euromonitor International from national statistics
Note: A = Agriculture, Hunting, Forestry and Fishing, B = Mining and Quarrying, C = Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and Household Goods, D = Financial Intermediation, Real Estate, Renting and Business Activities, E = Transport, Storage and Communications, F = Manufacturing, G = Construction, H = Education, Health, Social Work and Other Community, Social, Personal Service Activities, I = Public Administration and Defence; Compulsory Social Security, J = Hotels and Restaurants, K = Electricity, Gas and Water Supply
• Development of industry outside of oil has been made. Agriculture grew on par with oil extraction at an average yearly rate of 7.1% in real terms between 2006 and 2011, while growth in Nigeria’s services sectors, including health and education grew at 9.4% per year in real terms albeit from a low base. In 2010 three Nigerian sovereign wealth funds were set up to funnel oil revenues into development projects and stabilisation of the economy.
The government has announced steps towards licensing oil refinery to private companies in the country, while further embracing international opportunities for development. The temporary nature of the return to the petrol subsidy demonstrates a resolve to reducing corruption and supporting economic growth through infrastructure spending. A first step has been the authorisation of the Economic and Financial Crimes Commission to investigate corruption related to the fuel subsidy and the oil industry as a whole.
Better infrastructure and lower corruption is likely to foster foreign direct investment (FDI), a major driver for employment and industrial development. In 2010 (last date available) Ghana, a country with a similar economic makeup to Nigeria but lower levels of corruption had an FDI intensity (FDI as % of GDP) of 7.8%, while Nigeria’s was 3.1%. On-going discontent in Nigeria, especially in the north threatens to damage growth prospects.
Euromonitor International expects output in the Nigerian economy to grow on average by 6.2% per year in real terms between 2011 and 2016 as development continues. However gross incomes will continue to see subdued per capita growth at an average annual rate of 1.4% in real terms between 2011 and 2016.