Economy

Nigeria’s Economic Growth To Rebound At 1.1% – World Bank

Published

3 years ago

January 6, 2021

The World Bank has estimated that Nigeria’s economic growth will rebound at 1.1 per cent this year despite low oil prices and reduced investment.

The World Bank made this prediction in its Global Economic Prospects report for Sub-Saharan Africa (SSA) published on Tuesday.

It, however, said economic activities in the country would be by low oil prices, Organisation of the Petroleum Exporting Countries (OPEC) quotas, falling public investment due to weak government revenues.

The bank envisaged that there would be reduced private-sector investment due to business failures, and subdued foreign investor confidence.

“Growth in Nigeria is expected to resume at 1.1% in 2021. Activity is nevertheless anticipated to be dampened by low oil prices, OPEC quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence,” the report stated.

The World Bank identified Nigeria as one of the countries hardest hit by the COVID-19 pandemic, noting that the lockdown disrupted economic activity as the economy contracted by 4.1 per cent in 2020.

Analysts at the bank expressed fear that the pandemic would cause per capita incomes to decline by 0.2 per cent this year, setting Sustainable Development Goals (SDG) further out of reach in many countries in the region.

The bank predicted that tens of millions more people would be pushed into extreme poverty in 2020 and this year.

According to the global financial institution, South Africa’s growth is expected to rebound to 3.3 per cent in 2021, reflecting the lingering effects of the pandemic and suggesting that some mitigation measures will need to remain in place.

It estimated that there would be sluggish recovery in Sub-Saharan Africa due to persistent COVID-19 outbreaks in several economies that had inhibited the resumption of economic activity.

It added that higher international prices for agricultural commodities were expected to boost economic activities, saying that the recovery would be more anaemic among industrial commodity exporters.

The bank said, “Growth in the region is forecast to rebound moderately to 2.7 per cent in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners.

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“The resumption of activity in major advanced and emerging economies and key trading partners of the region (Europe, China, the United States) is chiefly underpinned by positive news on vaccine development and rollout as well as new rounds of fiscal stimulus.”

Analyst at the bank estimated that widescale distribution of a COVID-19 vaccine in the SSA region might face many hurdles, including poor transport infrastructure and weak health systems capacity and when compounded by natural disasters, recovery could be delayed.