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FRAGILE RECOVERY Rev
FRAGILE RECOVERY Rev
In 2016, Nigeria experienced its first full-year of recession in 25 years. Global oil prices
reached a 13-year low and oil production was crushed by vandalism and militant attacks in the
Niger Delta, resulting in severe contraction of oil GDP. While the oil sector represents only 8.4
percent of GDP, the lower foreign exchange earnings from oil exports had significant spillover
effects on non-oil sectors, especially industry and services, which are dependent on imports of
inputs and raw materials. Low oil revenues and the lack of major tax policy reforms to
significantly increase non-oil revenues led to large revenue shortfalls at all levels of government
in 2016. After a sharp depreciation of the exchange rate following the June 2016 liberalization
of the Naira, the Central Bank of Nigeria (CBN) maintained the interbank exchange rate at
around N 305 per USD.
Economic growth is expected to recover slightly, to above 1 percent in 2017, driven mainly
by the restoration of oil production to normal levels (2.1 million barrels per day) due to the
Government's efforts to resolve the fragile Niger Delta situation, as well as higher oil prices and
continued strong growth in agriculture, Although the CBN intends to restrain the growth of
narrow money in 2017, in line with its monetary growth benchmarks, inflation expectations
remain high in the short term.
In recognition of the deep weaknesses of the economy and the potential for further weakening,
the Federal Government has developed an Economic Recovery and Growth Plan (ERGP) for the
period 2017–2020.
The 12 strategic priorities for executing the Plan fall into five main categories: