Growth concerns mounting in Nigeria

Nigeria is facing an uphill battle to breathe life into its economic recovery. Following a sharp 6.1% y/y fall in GDP in Q2, more recent figures suggest that activity remains muted. Admittedly, Google mobility data suggest that visits to retail and recreation outlets returned to pre-crisis levels in September. But broader measures of activity, such as the whole economy PMI, only improved modestly last month. Meanwhile, OPEC+ oil production cuts continue to weigh heavily on the sector. Low oil prices are limiting the scope for fiscal support, reinforcing concerns about the outlook. The central bank did, admittedly, deliver another interest rate cut this month but further moves to clamp down on foreign currency transactions in a bid to prop up the naira are another bitter pill for investors to swallow.