IMF raises Nigeria’s economic growth forecast to 2.5%

The International Monetary Fund (IMF) has raised its economic growth forecast for Nigeria   in 2021 to   2.5 per cent.  

The IMF had earlier projected that the nation’s economy as measured by the Gross Domestic Product (GDP) will grow by 1.5 per cent in 2021 per cent. The new projection was contained in the April edition of the IMF’s   World Economic Outlook (WEO) released yesterday.   The IMF however  slightly reduced the growth forecast for the nation’s economy in   2022   to 2.3 per cent from 2.5 per cent. Furthermore, the IMF raised its economic growth forecast for the Sub Saharan Africa region in 2021 and 2020   to 3.4 per cent and 3.8 per cent respectively from 3.1 per cent and 3.7 per cent earlier projected in its   October WEO.  

Explaining, the IMF said: “The pandemic continues to exact a large toll on sub-Saharan Africa (especially, for example, Ghana, Kenya, Nigeria, South Africa).   ‘Following the largest contraction ever for the region (–1.9 percent in 2020), growth is expected to rebound to 3.4 percent in 2021, significantly lower than the trend anticipated before  the pandemic. Tourism-reliant economies will likely be the most affected.”  

The IMF also raised its global economic growth forecast for 2021 to 6.0 per cent from 5.5 per cent, projected in October.      According to the IMF,   “Global growth is projected at 6 percent in 2021, moderating to 4.4 percent in 2022. The projections for 2021 and 2022 are stronger than in the October 2020 WEO. “The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization, and the evolution of financial conditions,” the Fund said in its latest WEO which was released as part of the on-going virtual Spring Meetings of the World Bank and IMF.

Noting    that global prospects remained highly uncertain one year into the pandemic, the IMF added, “New virus mutations and the accumulating human toll raise concerns, even as growing vaccine coverage lifts sentiment. “Economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.   “The outlook depends not just on the outcome of the battle between the virus and vaccines—it also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.”

Written by: Emma Ujah, Abuja Bureau Chief, Vanguard

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