Nigeria and the uk

Nigeria and the UK

Page 1 of 13Patrick Kenworthy

An economic performance comparison

Background

Nigeria

Full name: The Federal Republic of Nigeria Population: 166.6 million (UN, 2012) Capital: Abuja Largest city: Lagos Area: 923,768 sq km (356,669 sq miles) Population Density: 126.22 People per Km2

Major languages: English (official), Yoruba, Ibo, Hausa Major religions: Islam, Christianity, indigenous beliefs Life expectancy: 52 years (men), 53 years (women) (UN) Monetary unit: 1 Nigerian naira = 100 kobo Main exports: Petroleum, petroleum products, cocoa, rubber GNI per capita: US $1,280 (World Bank, 2011) Internet domain: .ng International dialling code: +234

Oil-rich Nigeria has been held back by political instability, corruption, inadequate infrastructure, and poor macro-economic management, but in 2008 began pursuing economic reforms.

Nigeria's former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 95% of foreign exchange earnings and about 80% of national revenue.


Did you know?

Nigeria’s film industry is known as Nollywood

National symbols of Nigeria

Flag Bicolour

Emblem Coat of arms of Nigeria

Anthem "Arise, O Compatriots"

Animal Eagle

Bird Black Crowned Crane

Flower Costus spectabilis

Sport Football

http://en.wikipedia.org/wiki/Nigeria

Nigeria is the most populous country in Africa (166.6 million in 2012)

Its GDP was $450.5 billion in 2012, putting it at 31s t (out of 229) in the world but the 27 t h highest growth between 2011 and 2012, with a growth of 7.1%. Its inflation rate was 12.1% in 2012. Its GDP per capita was $2,700 in 2012, 180 t h in the world.

In 2012 it had the 11 t h largest labour force in the world with 53.83 million. In 2010 it is estimated that 70% of its population was below the poverty line.

The average annual growth of its GDP was 6.8% between 2005 and 2010.


Did you know?

Evidence from archaeological discoveries has shown that there was a history of human existence in Nigeria dated as far back as 9000 BC. One of the oldest found in the world

GDP - composition by sector:

agriculture: 0.7%

industry: 21.1%

Services: 78.2% (2012 est.)

Background

UK

Full Name: United Kingdom of Great Britain and Northern Ireland

Population: 63,181,775 (2011 Census) Population Density: 255.6 per Km2

Capital: London

Area: 243,610 km2

Life Expectancy: 78.16 (Males), 82.54 (Females)

Main exports: Fuels, Chemicals, beverages, food, tobacco

Internet Domain: .uk

International Dialling Code: +44The UK, a leading trading power and f inancial centre, is the second largest economy in Europe after Germany. Over the past two decades, the government has greatly reduced public ownership and contained the growth of social welfare programs. Agriculture is intensive, highly mechanized, and eff icient by European standards, producing about 60% of food needs with less than 2% of the labour force. The UK has large coal, natural gas, and oi l resources, but i ts oi l and natural gas reserves are decl ining and the UK became a net importer of energy in 2005.

GDP (purchasing power parity):

$2.323 tr i l l ion (2012 est.)

country comparison to the world: 9

$2.325 tr i l l ion (2011 est.)

$2.308 tr i l l ion (2010 est.)

note: data are in 2012 US dollars

GDP per Capita

$36,700 (2012 est.)


$37,100 (2011 est.)

$37,100 (2010 est.)


Public debt:

88.7% of GDP (2012 est.)


85% of GDP (2011 est.)

Inflation rate (consumer prices):

2.8% (2012 est.)


4.5% (2011 est.)

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2092rank.html?countryname=United%20Kingdom&countrycode=uk&regionCode=eur&rank=64#uk



Recent News"He's going to tear through London like a lion. He's the guy you want to have at your table at dinner; you want to be on his side of the room at the cocktail party."

Not a rock star on tour, not the actor of the moment, but the incoming Bank of England governor Mark Carney, as described by fellow Canadian and former government colleague Scott Reid.

His appointment has been a break with tradition in many ways.

He is a Canadian, for a start, and as such is the first non-British appointment to the post. He hails from Canada's sparsely populated Northwest Territories where, "rural just doesn't describe it" according to Scott Reid.

He also has a commercial banking, as well as public sector background, unlike his two most recent predecessors who had spent their careers within the Bank and academia.

So what should he do with his new job?

Peter Oppenheimer says that he would do well to remember the powers a Bank of England governor has at his disposal.

"The most important thing by far is personal oversight from the governor. The 'governor's eyebrow' it is called.

"Banks and the people who run them must conduct their business prudently and honestly, and if they don't, you sack them.

"Suitable distinguished bankers are not in plentiful supply."

DeAnne Julius agrees that while change is due, he must go cautiously.

"The British economy and the Bank of England are complex institutions, and I think he'd probably be wise to spend a little bit of time learning the job before bringing in any dramatic change."

For Peter Oppenheimer, he would simply welcome the chance to catch up with his former student.

"When the announcement was made of his appointment, he and I had a jolly email exchange, I said well done, and that I hoped that once he was in office I'd be allowed through the door to have a cup of coffee with him, and he assured me I'd be among his first guests. I'm looking forward very much to my invitation."

http://www.bbc.co.uk/news/business-23050597


UK inflation rate rises to 2.9% in June

The rate of consumer price index (CPI) inflation increased to 2.9% in June, up from 2.7% in May, according to the Office for National Statistics (ONS).

The figure, a 14-month high, was lower than the 3% expected by markets.

A rise in the inflation rate had been anticipated because of higher petrol and clothing prices versus a year ago. But it was moderated by slower annual rises in airfares and food prices.

Retail prices index (RPI) inflation also rose, to 3.3% from 3.1% in May.

The RPI index is used to calculate many pensions, as well as inflation-linked government bonds. It is calculated differently as it includes some housing costs and other items not included in CPI, and is typically higher than the CPI measure.

Mark Carney has avoided one minor embarrassment in his first weeks at the Bank of England.

If inflation had gone more than one percentage point above the Bank's 2% target, he would have had to write a letter of explanation to the Chancellor after the next Monetary Policy Committee meeting.

With the June rate coming in at 2.9% he can put his pen back in the drawer for a few weeks.

But inflation could yet move higher, with global oil costs always a threat to consumer prices here.

Higher inflation intensifies the continuing squeeze on consumers, with average wage rises below 1%.

Mr Carney's main focus seems to be on keeping interest rates low for as long as it takes to stimulate a sustained recovery.

But he may encounter increasing demands for tighter policy if inflation remains stubbornly above target and UK growth shows more momentum.

Cheaper airfares

The ONS said that air transport played the biggest role in dampening inflation this month, with fares falling 2.8% during June, compared with a 7.4% monthly increase in June 2012, due to lower European air fares in particular.

Despite falling somewhat back during the month, air fares in June were still 9.8% higher than they had been in June 2012 - which were in turn 21.3% higher than in June 2011.


Clothing and footwear prices fell 1.9% last month - as they typically do during the summer sales - but the fall was less than the 4.2% drop seen in June last year, which the ONS said had been the largest such decline on record.

Food prices fell half a percentage point during June, led by a fall of close to 2% in the cost of fruit and vegetables.

Despite reaching its highest level in over a year, the CPI measure remains well below the 4%-5% range experienced during much of 2011.

The Bank of England is supposed to keep CPI as close as possible to 2%. If it veers above 3%, the new Bank governor, Mark Carney, would be required to write a letter of explanation to the Chancellor George Osborne.

The lower-than-expected inflation rate also gives the Bank more leeway to pursue monetary stimulus, such as its buying up of government debts via quantitative easing, and its plans to start providing "forward guidance" from August - a commitment to keep interest rates at their historic low of 0.5% for longer.

The pound fell three quarters of a cent against the dollar to about $1.506 on the news, as markets took account of the likelihood of UK interest rates remaining at record lows.

"Presentationally, the surprise today is important," said Rob Wood, economist at Berenberg Bank

"With no letter required, it makes it marginally easier to introduce more formal forward guidance at the next policy meeting."

"Inflation is likely to bobble around 3% for the next few months before heading down towards the 2% target next year, as weak wage growth feeds through to lower costs and inflation," he predicted.

Inflationary pressures were also evident in the producer prices index, which tracks the prices charged by manufacturers.

It accelerated to a 2% annual rise in June, from 1.2% in May, according to the ONS, as the cost of oil and of foodstuffs rose sharply.

Savers hurting

However, some analysts said they foresaw inflation dropping sooner, with June possibly representing the high point.

"The uncertainty is whether inflation will peak at its present level before falling later this year, as we expect," said David Kern, chief economist at the British Chambers of Commerce.

"If this happens, it is still possible that the recovery will continue to slowly gather momentum throughout the year and into 2014.


"However if unexpected developments, such as renewed surges in energy prices, push inflation up further, our growth prospects will face new risks."

The rise in inflation is bad news for workers, whose pay continues to be eroded by rising prices.

Average earnings excluding bonuses in the three months to April were only 0.9% higher than a year earlier - two percentage points below the rate of inflation.

"Sustained high inflation, coupled with a prolonged pay freeze then squeeze for millions of public sector workers, has hit families hard," said Dave Prentis, general secretary of the Unison union.

Price rises are also hurting savers.

To beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 3.63% per annum, according to personal finance website Moneyfacts. However, no savings account is offering such a rate at the moment.

"The effect of inflation on savings means that £10,000 invested five years' ago, allowing for average interest and tax at 20%, would have the spending power of just £8,846 today," Moneyfacts said.

http://www.bbc.co.uk/news/business-23324635

Comments on the news storiesStory 1, New Governor of the Bank of England.

I believe this could affect the future of the UK’s economy because he has been successful at his previous post in Canada and could bring in policies to improve the UK and its current economic situation.

Story 2, Inflation rates rise to 2.9% in June

I believe this is important as the inflation rates are an indicator of how the economy if affecting the people of a country. Nigeria’s inflation rate was a staggering 9% in May, falling from 9.1% in April. When inflation is low, that means the growth in the supply of money is either halted or increasing at a low pace. High inflation means that the money supply is increasing relative to previous levels. High inflation is a negative for the average consumer as it causes prices of market goods to increase, before they are able to see an increase in their wages. The inflation rate was just below the Bank of England’s predicted 3% from last month.


GDP

From these graphs we can tell that the economy of the UK is much bigger, but not growing by a huge amount, if not shrinking. Nigeria however has a smaller scale economy but it is growing at a much higher rate.

GDP growth rates


From these graphs we can very clearly see that Nigeria’s Economy is much more stable than the UK’s, it has grown every quarter since 2008. The UK on the other has had many quarters with negative growth, and any positive growth has been miniscule. Despite having a higher overall GDP the UK is in a very unstable position in comparison to Nigeria on the grounds of their GDP growth.


Unemployment

From these graphs one can tell that a larger proportion of Nigeria’s workforce is unemployed compared to the UK’s. Nigeria’s unemployment is also growing at a slowing, but still high rate. The UK’s is staying about the same level, but the overall trend since 2012 is that it is very slowly going down.


Government Debt

From these graphs we can tell that the UK is in a large amount of debt compared to its GDP, and that figure is rising. Nigeria and the other hand has relatively low debt compared to its GDP and overall is showing a downward trend. This shows that Nigeria is in a much stronger position for which it to pay

off its debts.


ConclusionOverall I believe that despite being smaller, Nigeria’s economy is stronger that the economy of the UK. The growth rate of Nigeria is much higher and growing faster than the UK’s. Despite some data going against this (e.g. unemployment), I believe that the majority of the data suggests that Nigeria

is heading for more prosperous times.

However the data may be misleading. The main export of Nigeria is oil, and this is a very finite resource. This means that, perhaps Nigeria’s future is not as thriving as the data in this report may

suggest. The world is contently looking for replacements to crude oil, but presently it is a staple resource in all major countries, therefore the near future looks excellent for Nigeria and its

economy.

The UK’s near future looks to be bleak one, with government debt rising and inflation rising. However the downfall is not terminal, in all other major recessions the economy has recovered. The UK's recovery will gather pace from 2014 as exports and business investment take up the slack in the

economy, Ernst & Young's Item Club has predicted. The forecasting group predicted that UK economic growth would be 1.1% this year, rising to 2.2% next year and levelling out at about 2.5%

thereafter. The report gave no specific rationale for why business investment was expected to rebound next year, but noted that a mild recovery in investment in 2011 was snuffed out by the

uncertainty generated by the Eurozone crisis.

Sourceshttp://www.tradingeconomics.com/

http://www.bbc.co.uk/news/business/economy/


https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html

https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html

http://en.wikipedia.org/wiki/UK


http://en.wikipedia.org/wiki/UK

https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html

https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html


http://www.bbc.co.uk/news/business/economy/

http://www.tradingeconomics.com/

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Nigeria and the uk