Home Features The Year Ahead – What Can Nigeria Expect In 2018?

The Year Ahead – What Can Nigeria Expect In 2018?


By SBM Intelligence

2017 offered a ray of hope for Nigeria as the country exited a recession. However, the feeling remains that Nigeria failed to make good use of the opportunity presented by the economic recession. Our economy remains non-diversified and heavily reliant on oil To all intents, Nigeria has wasted the crisis.

In 2017, the Buhari Administration had a chance, with its second full year budget, to effect a change the budgeting process, and break a cycle which has kept the economy in the doldrums for a very long time. This did not happen, and with 2018, politicking is certain to take centre stage.

Security challenges continued, with a new upswing in Boko Haram attacks and the Pastoral Conflict entering a new phase where communities have taken up arms to defend themselves, and in an increasing number of cases, attack Fulani communities. The question of property rights, central to the resolution of this slow burning conflict, is yet to be answered. The much vaunted constitutional amendment that is meant to deal with many of these issues has progressed at snail’s pace.

As we enter the election campaign season, questions remain about the fundamental structure of Nigeria’s economy, and the Nigerian state itself. Increasingly, the Nigerian state no longer participates in the life of the Nigerian, except in the collection of taxes, levies and charges for certain required government services. Things will come to a head at some point, and we fear that the window for a genuine change is closing.

For most people in Nigeria, 2018 will present a mixed outlook. The government’s hope for the effects of rising oil prices to trickle down to various segments of the national economy, and by extension, down to the average Nigerian will be hinged more on hope than actual substance. For Nigerians to feel the real effects of a slowly recovering economy, more clarity on fiscal and monetary policy will be needed. However, with the general elections on the horizon, save for a few big ticket projects, this is unlikely to happen as we will be more likely to see direct cash transfers rather than policy actions that will be more long than short term.

For the average Nigerian, in 2018 he will have to continue now familiar cost cutting measures that have characterised much of the last two years. Household spending will remain depressed as budgets remain squeezed and brand loyalty will continue to wane. The rising popularity of alternative financial investments, cryptocurrencies, crowdfunding and non-financial lending lends credence to our 2017 observation that more Nigerians will seek to create, and grow additional streams of income as depressed wages, deferred spending and job losses mount.

Security will remain a concern for most Nigerians all through the year with crimes such as kidnapping and armed robbery set for their customary pre-election spike. More Nigerians will flee the economic deprivation and insecurity of the rural areas for the relative safety of the country’s urban centres, a trend which paradoxically, will have a negative impact on essential services and security in receiver cities, and have an impact on the crime rates there.

2018 will present the Nigerian with a range of opportunities on a host of fronts. Which opportunities get maximised will depend on her location, the prevailing economic climate and level of risk appetite.

 A summary of our predictions for 2018

  • We believe that the country’s GDP growth rate will double in 2018 despite the recent caps on production placed by OPEC.
  • We expect that political upheaval in the Middle East will cause supply disruptions in the global market leading to further increases in oil prices early in 2018.
  • We expect oil prices to drop to 2017 year end levels by the end of 2018.
  • Jobs lost during the recession will finally begin to return.
  • We will see increasing agitation from members of the middle class.
  • By the end of 2018 we predict that interest rates will be around 12%.
  • We do not expect the 2018 budget implementation to outperform those of the previous two years.
  • Issues around tariffs will not be resolved in 2018, hence investment in power generation will continue to be slow.
  • Some power projects, most notably the Afam project, will close during the year.
  • Nigeria will still not achieve 10GW in 2018.
  • Various initiatives been pushed by the CBN and Federal Ministry of Finance to spur lending to the real sector by banks will start to yield dividends.
  • Lending to the agriculture sector will improve.
  • We expect the All-Share Index to do just as well in 2018 as a minimum as it did in 2017.
  • The retail market will lean more on non-bank lenders.
  • The recommendations of the National Minimum Wage Committee inaugurated by President Buhari in November 2017 will not be implemented in 2018.
  • The unions will use the threat of mass action to extract a wage increase from the government.
  • Federal lawmakers will struggle to find the political will needed to enact critical laws necessary to open up key segments of the economy.
  • 2018 will see more strikes by public healthcare workers.
  • There will be a further continuation of the turf wars between various prosecutorial agencies.
  • There will be little progress recorded in driving effective service delivery in the judiciary.
  • 2018 will witness even more increases in clashes between herdsmen, who are mostly Fulani, and local indigenous communities.
  • A settlement of the Pastoral Conflict will prove difficult to come by in 2018 despite increased efforts by the FG, but as electioneering kicks into full swing, the violence will abate.
  • In various parts of the country in 2018, kidnapping and armed robbery will keep escalating.
  • 2018 will see attacks by Boko Haram decrease in frequency and increase in ferocity.
  • Secessionist groups such as IPOB will be seen as increasingly unimportant in 2018 as election fever reaches a higher pitch.
  • The NE and NC geopolitical zones will become more heavily reliant on aid organisations to address their health demands.
  • More Nigerians will take to the fake and sub-standard drug market.
  • The problem of food shortage will worsen in the northernmost parts of Nigeria.
  • Opposition Politicians, APC members who fall out of favour, and sympathetic businesses will be targeted for harassment by agents of the state.
  • The APC and PDP will not be the only recipients of defectors.


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