In Nigeria, some basic drivers of growth acceleration are currently materializing. The price signal is improving in two ways. First, crude oil prices are currently up to above USD70/bbl, a level where the country runs current account surpluses (+2.5% of GDP is expected in 2018). Second, inflation recorded the slowest pace in two years in March (+13.3% y/y). It should continue to surprise on the downside and reach 10% by year end, with a positive impact on household purchasing power. Exchange rate stabilization is the main explanation behind gradual disinflation since the official and black market exchange rates have been fairly aligned since August 2017. The credit signal is also normalizing. Money supply growth accelerated (+8.1% y/y in February) and capital inflows are back. Foreign currency liquidity is no longer scarce, as foreign exchange reserves are increasing fast and reached USD47bn in March 2018, or nine months of import cover (up from six months one year ago). It should help growth to accelerate from +0.8% in 2017 to +2.5% in 2018.
