ECONOMIC OVERVIEW

Nigeria is regarded as west Africa`s economic giant, contributing over 40% of West Africa`s GDP.Nigeria presents trade and investment opportunities for South Africa in Different sectors of the economy due to, among other factors, abundant natural and human resources and the vigorous macroeconomic reform programmes. Furthermore, Nigeria`s improving economic policies have enhanced the ways of doing business in the economy. The Nigerian government has shown commitment in improving the level of investments as well as way of doing business in order to achieve its long term economic goals.

GDP

According to the International Monetary Fund (IMF) forecast, the estimated GDP for Nigeria for the year 2008 was at $214 billion in value.Graph1 below shows that the GDP growth rate during the same year was estimated at 5.29 percent, a decrease from 6.1 percent from the year 2007. The IMF estimated a further decline in the growth to 2.8 percent for the year 2009. The decline in the forecasted level of GDP can be attributed to the global financial crisis which is causing deterioration in the world economic performance. The inflation rate in Nigeria has been volatile between the periods 2001-2008. Graph 2 shows that in 2001, inflation averaged 18 percent per annum and by 2002, the Central Bank had managed to bring inflation down to an average annual rate of below 14 percent. In 2005, inflation had gone back to its highest peak of 18 percent, but through prudent macroeconomic policy, the Central Bank managed to bring it down to a single digit, with an annual average of below 6 percent by 2007. However, by the year 2008, inflation had almost doubled, with an average annual rate of 11 percent. The most contributing factors to the fluctuating inflation rate in the country are both the food and oil prices.

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