By Modupe Gbadeyanka
A growth rate of 1.2 percent has been predicted by the World Bank for Nigeria’s economy in 2017, Business Post has learnt.
The global financial institution, in its Global Economic Prospects for June 2017 released this week, said it expects the Africa’s second biggest economy to rise to 2.4 percent in 2018 and 2.5 percent in 2019, when the country goes to the polls to elect a new leader.
According to the World Bank, militants’ attacks on oil pipelines in Nigeria have decreased, causing oil exports to rebound on the back of an uptick in oil production from fields previously damaged by vandals, ultimately leading to more earnings for the country to help the economy.
The organisation noted that the economic recession in Nigeria was receding and that mining companies across the region were resuming production and exports.
“In the first quarter of 2017, GDP fell by 0.5 percent (y/y), compared with a 1.7 percent contraction in the fourth quarter of 2016.
“The Purchasing Managers’ Index for manufacturers returned to expansionary territory in April, indicating growth in the sector after contraction in the first quarter.
“Non-resource-intensive countries, including those in the West African Economic and Monetary Union (WAEMU), have been expanding at a solid pace. Several factors are preventing a more vigorous recovery,” a part of the report said.
It pointed out that although a process of disinflation has started in Angola and Nigeria, inflation in both countries remains elevated, owing to a highly depreciated parallel market exchange rate.
The World Bank said for the Sub-Saharan Africa, growth, despite slowing sharply in 2016, was recovering, supported by modestly rising commodity prices, strengthening external demand, and the end of drought in several countries.
It noted that growth in region is forecast to pick up to 2.6 percent in 2017, and average 3.4 percent in 2018-19, slightly above population growth.
The recovery is predicated on moderately rising commodity prices and reforms to tackle macroeconomic imbalances. The forecasts are below those in January, reflecting a slower-than anticipated recovery in several oil and metals exporters, the World Bank said.
Per capita output growth—which is projected to increase from -0.1 percent in 2017 to 0.7 percent in 2018-19—will remain insufficient to achieve poverty reduction goals in the region if the constraints to more vigorous growth persist, the report stated.
