Nigeria: Business confidence jumps in December to one-year high

In December, the Business Sentiment Indicator (BSI) developed by MNI Indicators and Standard Chartered rose from November’s 62.6 to 67.6. The print marked the highest reading in 2015. As a result, the indicator continues to rise further above the 50-threshold that separates contraction from expansion in business conditions.

December’s increase reflected gains in all the sub-components of the index. That said, December’s strong reading was mainly the result of the Christmas holiday season, which boosted economic sentiment despite a backdrop of falling oil prices. Moreover, forward-looking indicators suggest that businesses are concerned about the outlook for Q1 2016. MNI and Standard Chartered analysts point out that, “2016 will be a pivotal year for Nigeria we think; any rebound in growth will depend on the pace of reforms to help deal with a lower oil price. This uncertainty about the likely growth outcome in 2016 may account for some of the fall in future expectations indicators.”

Met the why particular Consensus Forecast panelists expect gross fixed investment growth to reach 5.0% in 2016, which is unchanged from last month’s forecast. For 2017, panelists forecast an expansion of 6.7%.