Nigeria’s economy is expected to recover in at 1.1% in 2021 from the estimated 4.1 contraction in 2020 and would further grow to 1.8% in 2022, the World Bank said in its January 2021 Global Economic Prospects.
The rebound is chiefly underpinned by positive news on vaccine development and rollout as well as new rounds of fiscal stimulus.
The World Bank said economic activity was anticipated to be dampened by low oil prices, OPEC quotas, failing public investment due to weak government revenues, constrained private investment due to firm failures and subdued foreign investor confidence.
Ayodeji Ebo, senior economist/head, research & strategy, Greenwich Merchant Bank, said the improvement in the World Bank projection was based on improvement in oil prices and the covid-19 vaccine.
“So they believe that with the improvement in oil prices, Nigeria could rebound and it is positive trajectory from Q2. Also they will be hoping that government could come up with deliberate policies that would drive economic growth”. He said.
Nigeria’s economy officially entered a recession after contracting 3.62% in the third quarter of the year, caused majorly by impact of the pandemic and a lack of fiscal reforms to boost confidence and attract private investment in an economy that depends largely on the oil sector to grow.
“We expect GDP growth to remain subdued in 2021 at only 2.5%”, Razia Khan, managing Director, chief economist, Africa and Middle East Global Research, Standard Chartered Bank.
Growth in the Sub-Saharan African (SSA) region is forecast to rebound moderately to 2.7% in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisaged, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners.
“If Nigeria can resolve security challenges in the country, put in place policies that will encourage private in agriculture, manufacturing, real estate sectors, while government continues her investments in transportation, infrastructure, the country can record over 5% GDP growth rate in the short term”, Ayodele Akinwunmi, relationshi0p manager, corporate banking at FSDH Merchant bank ltd. said.
BusinessDay 06 January 6, 2021
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