Nearing the high point of the electrical cycle
Elections are set for February 2015. While neither the ruling PDP nor the opposition APC has yet declared its presidential candidates, we think that on balance the advantages of incumbency will again prove telling. The loser in the run-up to the polls has been the reform programmes.
Slippage but no implosion
Nigeria is not Ghana. FGN spending will pick up and the deficit widens in the run-up. However, this doesn’t mean a loss of macroeconomic discipline. Once the elections are over, we anticipate another attempted deregulation of the petrol price. This time it could stick.
Holding the line on the exchange rate
The new CBN governor has the same policy stance as his predecessors on exchange-rate and price stability. We may currently be in a lull due to a seasonal fall-off in fx demand but we think that the CBN can hold the line subject to a small adjustment to the mid-point at some point in 2015. It has several monetary tools at its disposal.
To view the summary CLICK HERE
Please email the research team to access the full report*
