May 29, 2014

Nigeria Won’t Cut GDP Outlook on Boko Attacks: Minister

Dolapo Omidire

Nigeria won’t lower its economic growth forecast for this year even amid security concerns raised by the wave of Islamist militant attacks that have left hundreds dead, the finance minister said.

“We are sticking to 6.75 percent,” Ngozi Okonjo-Iweala said in an interview yesterday in the Rwandan capital, Kigali, where she’s attending an African Development Bank meeting. “We have taken into account already whatever disruptions there might be.”

About 90 people were killed in explosions in the capital, Abuja, on April 14 and May 1 claimed by Boko Haram, the Islamist group that also kidnapped more than 200 schoolgirls last month. Further attacks in various locations this week, which no group has claimed responsibility for, have killed at least 155 people.

The government’s growth projection is lower than the 7.2 percent forecast by the International Monetary Fund, while Moody’s Investors Service “just told us they upgraded their projection to 8 percent,” Okonjo-Iweala said.

Nigeria sees other sources of growth in the economy, such as housing, that “we think are going to make up for any losses,” Okonjo-Iweala said. The Nigeria Mortgage Refinance Corp. may start a program next month that is scheduled to finance construction of 75,000 homes a year.

Economic Resilience

Investors think the Nigerian economy is resilient, Okonjo-Iweala said, adding that during her visit to Kigali she met with 25 investors, mostly from the U.S and U.K., who were inquiring about opportunities in Africa’s biggest economy. “The evidence is that yields on our bonds are holding very steady,” she said.

Nigerian dollar bonds due July 2023 fell 39 basis points this year to 5.53 percent yesterday.

The naira is trading in a stable manner against the dollar and there has been no discussion on devaluing the currency, the minister said. The Nigerian central bank targets a range of 3 percentage points above or below 155 naira per dollar at its twice-weekly auctions of dollars to commercial lenders.

The naira increased for a third straight day, trading 0.7 percent stronger at 161.03 per dollar by 6:30 a.m. in Abuja.


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