Africa’s largest economy turned the corner on a scathing recession in the second quarter of 2017, as five straight quarters of contraction that started in the first quarter of 2016, came to a screeching halt. The turnaround was down to higher oil prices and improved production levels. Oil prices averaged $55 in 2017, 45 percent higher than the average price of $38 in 2016, according to data compiled by BusinessDay. Oil production, helped by reduced hostilities in the Niger-Delta, was up some 42 percent to an average of 1.7 million barrels daily in the first 10 months of 2017 from as low as 1.2 million barrels in 2016, according to OPEC data.
The Monetary Policy Committee held interest rate at a record high of 14 percent at the last meeting of 2017. The central bank has kept the monetary policy rate unchanged since July 2016, balancing the need to fight inflation and stabilize the naira with trying to support an economy emerging from its worst slump in 25 years. While price growth slowed for the 10th straight month to 15.9 percent in November, it’s been above the authorities’ target range of 6-9 percent for more than two years.
Federal account allocations hit a three-year high in the eleven months through 2017, according to data compiled by BusinessDay, in what is a potential boost for government at all three levels faced with a biting revenue crisis.
The three tiers of government which comprise the Federal government, state governments and local governments, shared a total of N5.64 trillion in the period under review, as the increase in global oil prices and recovering production volume lifts public earnings.
That amount represents a 14 percent increase from N4.94 trillion shared in the comparable period of 2016, barring December. December allocations for this year are yet to be made.
This year’s allocation is also 30.6 percent or N1.3 trillion more than the N4.33 trillion allocated in the first eleven months of 2015, making it the highest since 2014 when allocations totalled N7.9 trillion and a barrel of crude oil sold for as high as $USD106.