Growth in Nigeria- the largest economy of Africa, would remain subdued in 2019 at 2.1%, the World Bank Group’s latest economic assessment has said, which is contrary to earlier projection of 2.2% and Federal Government’s hopes of 2.7%.
Even in 2020, growth in Nigeria is anticipated to edge up to 2.2 per cent, just a paltry 0.1 per cent, while South Africa is projected to rise to 1.5 per cent and Angola, 2.9 per cent, as emerging and developing economies’ growth would only pick up to 4.6 per cent in 2020, from four per cent in 2019. The global institution said Nigeria’s recovery in oil production has fallen short of expectations and policy uncertainty has also constrained investment in new capacity, while weak domestic demand amid a challenging business environment has dampened non-oil growth. The development means that respite is yet to come to Nigeria’s growth quest, with the population rising faster and now calling to question President Muhammad’s Buhari’s usual delay in decision making, particularly the formation of cabinet, to kick off economic activities and reduce speculations over policy uncertainties in the country.
While growth in Nigeria is anticipated to edge up to 2.2% in 2020, the report said foreign exchange restrictions, supply disruptions in the oil sector, and a lack of needed reforms are seen as constraints to stronger growth. This is coming as the World Bank also said the global economic growth would ease to a weaker-than-expected 2.6% in 2019, before inching up to 2.7 per cent in 2020, while growth in emerging market and developing economies, like Nigeria, is expected to stabilise in 2020, though weak, as some countries would overcome financial strain. “Stronger economic growth is essential to reducing poverty and improving living standards. Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential.
“It’s urgent that countries make significant structural reforms that improve the business climate and attract investment. They also need to make debt management and transparency a high priority so that new debt adds to growth and investment,” the World Bank Group President, David Malpass, said. He noted that emerging and developing economies’ growth is constrained by sluggish investment and risks due to rising trade barriers, renewed financial stress, and sharper-than-expected slowdowns in several major economies. Nigeria has been struggling to grow after exiting the 2016 economic recession in 2017, which was assessed toe induced by heavy dependence on import of items over low domestic capacity and crude oil price volatility.
Meanwhile, growth in Sub-Saharan Africa is expected to accelerate to 3.3% in 2020, on assumptions that investor sentiment toward some of the large economies of the region improves, oil production recovers in large exporters and robust growth in non-resource-intensive economies be underpinned by continued strong agricultural production and sustained public investment. Unfortunately, while per capita Gross Domestic Product is expected to rise in the region, it will nevertheless be insufficient to significantly reduce poverty. Growth the sub-region would be led by non-resource-intensive countries like Rwanda, Uganda, Benin, Côte d’Ivoire and Rwanda, supported by public investment, good harvests boosting agricultural growth.