Global reports downgrade Nigeria’s 2015 economy growth rate.

Following last week’s report on Nigeria’s gross domestic product (GDP) update local and international economic and research reports have revised growth forecast for Nigerian economy downwards.

For Rennaiance Capital (Rencap Group), a multinational financial institution, Nigeria’s economy will grow year-on-year (Y-o-Y) by 2.8 per cent, down from its earlier forecast growth rate of 3.4 per cent.

Afrinvest Group, one of Nigeria’s leading investment banking institutions, said the economy growth rate would be down to 3.5 per cent as against 5.0 per cent it had projected this year.

In its report Rencap Group stated “we revise down our 2015 growth forecast for Nigeria to 2.8% (from 3.4%) following this week’s release of exceptionally weak growth data from Nigeria and South Africa”. Rencap was referring to the data from the National Bureau of Statistic (NBS) in its latest economic statistical report focusing on the Nation’s GDP for second quarter (Q2) 2015.

The NBS report indicated that the real growth rate of the monetary value of all goods and services produced in the country during the period slowed to 2.4 per cent Y-o-Y, down from 4.0 per cent in Q1, 2015 and 6.5 per cent in Q2, 2014.

This was on the back of the low crude oil prices and decline in oil production to 2.1mbpd from 2.2mbpd in Q2, 2014.

Giving reason for the growth rate mark-down Rencap Group said “we revise down our 2015 growth forecast for two reasons: First half 2015 growth of 3.1 per cent Y-o-Y came below our 2015 forecast of 3.4 per cent; and secondly we expect supply constraints, related to foreign exchange restrictions and the de facto import ban, to undermine growth in second half 2015.

It added “as population growth is increasing at 3.0 per cent per annum, this implies negative per-capita income growth, which acts as a drag on the consumer sector”.