World Bank predicts Nigeria’s economic growth to resume at 1.1%

The World Bank forecasts that growth in Nigeria’s economy will resume this year at 1.1 per cent, which is weaker than previous projections, edging up to 1.8 per cent in 2022.

It stated this in a new report, titled, “Global Economic Prospects” released on Tuesday.

It however warned that Nigeria’s economy would face severe challenges this year as a result of dampened low oil prices, falling public investment due to weak government revenues, constrained private investment due to firm failures and subdued foreign investor confidence.

The Bretton Woods Institution projected that the global economy would expand by four per cent in 2021 on the back of an initial COVID-19 vaccine roll-out becoming widespread throughout the year.

Growth in sub-Saharan Africa is expected to rebound only moderately to 2.7 per cent this year— 0.4 percentage point weaker than previously projected — before firming to 3.3 per cent in 2022.

It stated, “Private consumption prospects will be weighed down by lost incomes and higher precautionary saving among non-poor households, as well as lower remittances and the depletion of savings among poor and unemployed households amid inadequate social safety nets,” the report said.

“The pandemic caused an estimated 6.1 per cent fall in per capita income last year and is expected to lead to a further 0.2 per cent decline in 2021, before firming somewhat in 2022.

“The resultant decline in per capita income is expected to set average living standards back by a decade or more in a quarter of sub-Saharan African economies, with even more severe setbacks in Nigeria and South Africa — home to one-quarter of the region’s population.

“In all, this reversal is projected to push tens of million more people in the region into extreme poverty cumulatively in 2020 and 2021.”

The report said a high debt burden would likely limit the ability of many sub-saharan countries to fund post-COVID reforms.

It however noted that pandemic could create a momentum to implement major reforms such as removing inefficient fuel subsidies, liberalising the telecommunication sector and promoting competition in the energy sector.