The rate of unemployment in the country is expected to increase further by about two per cent this year, a report has predicted.
The Financial Derivatives Company Limited (FDC), a Lagos-based financial advisory firm stated this in its 2014 outlook obtained Monday.
According to the National Bureau of Statistics (NBS), the rate of unemployment in Nigeria stood at 23.9 per cent in 2011, while urban unemployment was estimated at 29.5 per cent in 2013.
In addition, the FDC report also forecast that the misery index would likely to increase further in 2014, from the 38 per cent it stood in 2013. It also predicted that the nation’s currency would fall by about three per cent this year, even as it anticipated a correction in the stock market.
The report equally stated that inflationary pressure would manifest this year, adding that the Consumer Price Index (CPI) which stood at 7.9 per cent as at November 2013, may increase to between 9.5 and 11 per cent.
“External reserves to deplete further to $40 billion. Recurrent expenditure projected to increase to 72.71 per cent of total government spending,” it added.
Furthermore, the report predicted that the net Foreign Direct Investment (FDI) would decline to $4.8 billion in 2014, adding that the United States tapering of its quantitative easing programme would trigger capital flow reversal.
The report showed that in 2013, power generation declined as the naira shed 12 per cent at the parallel market, while the exchange rate divergence ratio widened.
In the review period, external reserves declined to $43 billion, with net FDI declining to $5.3 billion as trade balance decreased to $40.2 billion.
Nigeria is ranked 37th largest economy in the world (with GDP of $283 million) and is projected to rise to 13th position in 2020. The countries potential GDP growth declined to 11 per cent, the report added.
In a separate report yesterday, an Economist at Renaissance Capital, Charlie Robertson pointed out that with the proposed rebasing of the country’s GDP next month, the Nigerian economy would become the biggest in Africa at over $400 billion.
“Electricity reform is working. Growth of seven per cent a year since 2000 means Nigeria’s GDP is on course to be bigger than 2012 Japan by 2050, at over $5 trillion in today’s money by 2050. We like Nigeria for the first quarter of 2014,” Robertson added.