Nigeria: IMF Raises Nigeria’s Economic Growth Projection to 2.6%

Abuja, Lagos — The International Monetary Fund (IMF) has raised Nigeria’s 2021 economic growth forecast marginally from the 2.5 per cent it had previously estimated to 2.6 per cent.

Additionally, the fund reviewed upward the country’s 2022 growth prediction upward from 2.6 per cent to 2.7 per cent.

The IMF stated this in its latest World Economic Outlook (WEO) released yesterday, at the ongoing hybrid annual joint meetings in collaboration with the World Bank, in Washington DC.

Speaking during a virtual media briefing on the WEO, the Economic Counselor and Director of the Research Department, Ms. Gita Gopinath in responding to questions on recovery in Africa said: “Africa has gone through a very tough time with this crisis just the parts of the world have.”

“What is unfortunately unique about Africa is in terms of the levels of vaccination we are looking at. You know less than four per cent of the population in Africa have been vaccinated, while we’re looking at for instance advanced economies where it’s almost 60 per cent.”

She noted that Africa’s low COVID-19 vaccination level poses great risk to the region and the global economy.

She added: “You know across the different parts of the world, the region where there has been the greatest amount of limited access to vaccinations is Africa and that is one of the big concerns that we have, because we know that this pandemic is not over.

“This is why we are pressing hard to get to 40 per cent target for all countries by the end of this year and this will require that countries, deliver on their vaccine donation pledges and also that the major manufacturers prioritise deliveries to Africa, that will help get more vaccines to the African continent.

“So I think that is a very important health issue that needs to be addressed with the region as a whole.”

“In terms of the other factors, Africa still has to deal with issues of high levels of debt in many countries and many countries are in high levels of debt distress already.

“So, the international community has to play a very important role in being able to restructure this debt, but also in providing additional financing.

“We estimate that there will be a need for around $250 billion of additional financing to make sure that the African continent is able to achieve its development goals over the next five years. And that requires immediate attention from the international community.”

The multilateral institution also projected a five per cent and 2.2 per cent growth rate for South Africa in 2021 and 2022 respectively.

A forecast of 3.7 per cent and 3.8 per cent growth rate was estimated for Sub-Saharan Africa in 2021 and 2022 respectively.

It also called for an urgent global action to slow down rising temperatures even as it expressed concern that if the COVID-19 were to have a prolonged impact into the medium-term, it could reduce global gross domestic product (GDP) by a cumulative $5.3 trillion over the next five years relative to the current projection.

The multilateral financial institution which stated that the global economy would witness a hobbled recovery along entrenched fault lines, noted that as recovery from the COVID-19 pandemic continues amid increasing uncertainty and more complex trade-offs, the momentum has weakened, hobbled by the pandemic.

The IMF report stated: “Fueled by the highly transmissible Delta variant, the recorded global COVID-19 death toll has risen close to 5 million and health risks abound, holding back a full return to normalcy.

“Pandemic outbreaks in critical links of global supply chains have resulted in longer than expected supply disruptions, feeding inflation in many countries.

“Overall, risks to economic prospects have increased and policy trade-offs have become more complex.

“Compared to our July forecast, the global growth projection for 2021 has been revised down marginally to 5.9 per cent and is unchanged for 2022 at 4.9 per cent. However, this modest headline revision masks large downgrades for some countries.”

According to the IMF, the outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics, adding that the downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions.

It noted that partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices, as pandemic-related disruptions to contact-intensive sectors had caused the labour market recovery to significantly lag the output recovery in most countries.

The IMF explained that the dangerous divergence in economic prospects across countries remained a major concern, adding that aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9 per cent in 2024.


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Author : This Day

Publish date : 2021-10-13 08:34:14

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