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The World Bank has raised Nigeria’s 2021 growth forecast by 0.7 per cent to 1.8 per cent from the 1.1 per cent it projected for the country in January. The bank, which stated this in the latest edition of its Global Economic Prospects released yesterday, also revised its growth forecast for the country next year upwards to 2.1 per cent from 1.8 per cent that the Bretton Woods institution predicted in January. It said that the new projection for Nigeria was based on the assumption that oil prices would continue to head north,the country will adopt a market-based flexible exchange rate management and also gradually implement structural reforms in its oil sector.
In addition, the World Bank stated: “The expected pickup is also predicated on continued vaccinations in the second half of this year and a gradual relaxation of COVID-related restrictions that will allow activity to improve. Nonetheless, output in Nigeria is not expected to return to its 2019 level until end- 2022.”
The bank’s upward revision of Nigeria’s growth forecast follows a similar action by the International Monetary Fund (IMF), which, in its World Economic Outlook (WEO) released in April, raised its 2021 Gross Domestic Product (GDP) growth forecast for Nigeria to 2.5 per cent from the 1.5 per cent it projected in January. However, while Nigeria’s GDP is projected to return to growth this year after recording a pandemic-induced negative growth of 1.8 per cent in 2020, the World Bank said in its latest report that sub-Saharan Africa’s recovery this year would be tepid compared with the global economy, which is expected to expand 5.6 per cent in 2021.
It stated that sub-Saharan Africa’s GDP was expected to grow by 2.8 per cent in 2021 and 3.3 per cent next year, adding that “positive spillovers from strengthening global activity, better international control of COVID-19, and strong domestic activity in agricultural commodity exporters are expected to gradually help lift growth.” According to the report, activity in the three largest economies in the region—Angola, Nigeria and South Africa—has partially recovered after falling by 4.2 per cent in 2020.
It, however, stated: “The recovery is envisioned to remain fragile, given the legacies of the pandemic and the slow pace of vaccinations in the region. In a region where tens of millions more people are estimated to have slipped into extreme poverty because of COVID-19, per capita income growth is set to remain feeble, averaging 0.4 per cent a year in 2021- 22, reversing only a small part of last year’s loss.”
Indeed, according to the report, sub-Saharan Africa is expected to have the second-slowest growth this year among emerging market and developing economy (EMDE) regions. Furthermore, the World Bank said that risks to its projections for the region were tilted to the downside and that these include “lingering procurement and logistical impediments to vaccinations, further increases in food prices that could worsen food insecurity, rising internal tensions and conflicts, and deeperthan expected long-term damage from the pandemic.”
Commenting on the report, President of the World Bank Group, David Malpass, said: “While there are welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world. “Globally coordinated efforts are essential to accelerate vaccine distribution and debt relief, particularly for low-income countries. As the health crisis eases, policymakers will need to address the pandemic’s lasting effects and take steps to spur green, resilient and inclusive growth while safeguarding macroeconomic stability.”