Contraste de hipótesis / operacionalización de variables

The recent rebasing of the Nigerian economy (GDP) from 1999 to 2010 led to an estimated increase of 89 percent for the economy. Thus the estimated nominal GDP is about USD 510 billion, whereas that of South Africa is about USD 352 billion. Despite the growth of the oil sector being disrupted in 2013 because of constant oil theft, low investments in the upstream sector, lack of funds, etc.; the

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non-oil sector, especially crops production, services and trade has shown considerable improvements with real GDP growth of 5.4 percent, 8.3 percent and 7.8 percent in 2011, 2012 and 2013, respectively. However, the non-passage of the Petroleum Industry Bill also seems to be contributing to the observed weak investment in exploration and exploitation of oil and gas in the country. Nonetheless, the recorded overall GDP growth rates of 7.4 percent and 6.5 percent in 2013 and 2012 respectively, have not resulted in the reduction of poverty and inequality in the system, which confirms the paradox espoused by many analysts. Furthermore, the new statistics indicate a bit of more diversification of the economy, but the real effects are yet to be seen.

However, the recovery of the global economy, positive harvests and repositioning of the power sector would determine the prospects of continued growth. Howbeit, the rebasing of the GDP would lead to lower growth values and negative oil sector growth would reduce the overall projected GDP growth. Moreover, the rebased GDP shows the emergence of new activities that are scaling –up growth. The most prominent of these is the motion pictures, sound recordings and music waxing and production industry, otherwise known as Nollywood. The challenge of a decade of inclusive growth in Nigeria is still unabated because poverty and employment remain trigger points in the system. At the moment, the agricultural sector is largely informal and employs about 75 percent of the labour force, which belong to poor strata. Rejuvenating the sector will propel employment and integration with other sectors of the economy. This will increase revenues from export, income, boosting for the poor and reduction of poverty incidence. Thus, poverty reduction, employment creation and protection of the vulnerable group and the large informal sector group should be primarily the focus of the government.

Table 3.10b: Macroeconomic Indicators

Indicators 2012 2013(e) 2014(p) 2015(p)

Real GDP Growth 6.7 7.4 7.2 7.1

Real GDP Per Capita Growth 3.9 3.6 4.4 1.7

CPI Inflation 12.2 8.5 8.1 8.2

Budget Balance % GDP -1.4 -1.8 -1.2 -2.0

Current Account Balance % GDP 2.8 4.4 5.8 5.1

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations

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In-addition, both export revenues and import expenditures declined, with export revenues declining more. This decline in export revenues has been mainly attributed to about a 10 percent decline in crude-oil and gas export earnings. Furthermore, the Foreign Capital Inflows increased by about 28 percent (USD 21 billion) in 2013 from an estimated USD 16 billion in 2012. On the FDIs declined within the period largely due to the sluggish global economic recovery and the status in the oil sector given that a large percentage of FDI inflows into the economy go to the oil sector. Furthermore, foreign reserves declined to about USD 43 billion at the end of 2013 from about USD 44 billion in 2012 due to the continued decline in oil-export revenues and its use by monetary authorities to hedge the value of the Naira (NGN) against the Dollar (USD). Howbeit, at the current level, the country’s external reserves can still support about ten months of imports.

The management of fiscal policy since 2011 has centered on fiscal consolidation to gain macroeconomic stability. As a result of this scenario, the fiscal deficit as a percent GDP has been estimated at -1.4 percent and -1.8 percent for 2012 and 2013 respectively, even the values are well below the fiscal stance of a maximum of 3.0 percent deficit as espoused in the Fiscal Responsibility Act (FRA). In pursuance of its fiscal policy, the government limits its borrowing requirements in compliance with the Fiscal Responsibility Act (2007). Available figures from the Debt Management Office (DMO) as at 31 December 2013 indicate that Nigeria’s public debt stock was USD 64.51 billion. Of this amount, the external debt of both the federal and state governments was only USD 8.8 billion, of which the state governments constituted about 38 percent. The balance of USD 55.7 billion (about 86.3 percent of the total) drawn by both the federal and state governments makes up the domestic debt. Following these estimates, new borrowing in 2014 is estimated to be NGN 572 billion (USD 3.62 billion), slightly down from NGN 577 billion (USD 3.65 billion) in 2013.

The 2013 budget was signed into law in February, which was two months earlier than the preceding year because the usual disagreements between the executive

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and the legislature over appropriation estimates were resolved in good time. 2013 Capital Expenditure to Total Expenditure diminished to an estimated 23.9 percent from 24.3 percent in 2012. On the other hand, the share of capital expenditure on social community services (health, education and other allied services) in the total increased from 10.0 percent in 2011 to 11.1 percent in 2012 while economic services (agriculture and infrastructures) declined from 42.1 percent to 36.7 percent respectively. However, the persistent decline in oil revenues portends risk for fiscal policy management and will shape the trajectory of the medium-term fiscal outcome. Thus, if the declining oil revenues are not contained as well as the rise in non-oil revenues are not sustained, new fiscal risks may set in. This obviously would hinder the success of on-going reforms, and impact negatively on economic activities. This eventually leads to a huge downward adjustment for capital expenditure because recurrent expenditures, which are mainly salaries and overhead components. These can hardly be adjusted automatically. These downward adjustments in capital expenditure could further slow down economic and growth.

Table 3.10c: Public Finances (Percent of GDP)

Indicators 2005 2010 2011 2012 2013(e) 2014(p) 2015(p) Tax Revenue 3.7 2.9 2.8 3.0 2.8 2.8 2.8 Oil Revenue 21.3 9.8 13.9 11.1 11.1 10.9 10.2 Total Revenue and Grants 25.3 13.3 17.4 14.8 25.7 14.3 13.7

Total Expenditure and Net Lending (a)

26.0 15.3 19.2 16.1 27.5 15.6 15.7

Current Expenditure (Total) 13.1 9.8 14.8 11.6 18.0 11.3 11.4 Current Expenditure (Excluding

Interest)

11.3 8.7 13.6 10.6 17.1 10.4 10.6 Wages and Salary 2.4 2.8 2.9 2.6 2.5 2.4 2.3 Interests 1.7 1.1 1.2 1.0 0.9 0.8 0.9 Capital Expenditure 4.0 5.3 4.2 4.4 7.6 4.2 4.1 Primary Balance 1.0 -0.9 -0.6 -0.4 -2.7 -0.4 -1.2 Overall Balance - 0.7 -2.0 -1.8 -1.4 -1.8 -1.2 -2.0

Note: Only major items are reported.

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations

By the end of 2012 and 2013, available credit to the private sector (percent of GDP) was 37.3 percent and 30 percent respectively as against the value of 34.6 percent by the end of 2011. Nonetheless, the formal financial market in Nigeria does not encapsulate the entire population; about 45 percent of the adult population is still outside the banking system. Several reasons such as poor

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education, cultural issues, unemployment amongst others have been adduced as the cause of this scenario. Furthermore, it is estimated that Nigeria has the highest financial exclusion of about 46.3 percent in sub-Saharan Africa. As part of the Maya Declaration in 2011, the CBN launched National Financial Inclusion Strategy and the Micro, Small and Medium Enterprises Development Fund in October 2012. This has further led to the introduction of the CBN’s Cashless Society Policy as well as the introduction of mobile money services in the country. In-addition, the forthcoming 2015 general elections, which are likely to induce a higher-than-normal fiscal spending has been identified as a risk to the sustainability of the current monetary policy in Nigeria. Previous experiences have shown that the CBN finds it very hard to mop up excess liquidity in the system, thus a stable inflation rate may not be guaranteed.

3.4 Review of Performance of MDG Goals for Health and Education in