World Bank says Nigeria’s economy will grow poorer than earlier projected

The World Bank’s 2018 Global Economic Prospect report launched on Tuesday, has shown that the Nigerian economy in 2018 and 2019 will grow lower than the world financial body had earlier projected.

The World Bank had in its earlier report projected Nigeria’s economic growth rate for 2018 at 2.5 per cent and 2.8 per cent in 2019.

However, in its latest World Economic Outlook released at the on-going spring meeting of the World Bank Group in Washington DC, United States of America, the World Bank reviewed Nigeria’s economic growth downward to 2.1 per cent as against the earlier 2.5 per cent for 2018 and 1.9 per cent as against the earlier 2.8 per cent for 2019.

Though the new projection still shows a huge leap against the actual of 0.8 per cent achieved in 2017 and 0.2 per cent higher than its projection in October last year, it indicated a reversal of position as well as a widening gap between the positions of the Federal Government and the World Bank on the recovery prospects on post-recession.

The report also sign-posts the Bank’s worries over possible stalling of growth momentum as Nigeria prepares for a general election scheduled for first quarter in 2019.

President Muhammadu Buhari-led Federal government had projected Gross Domestic Product (GDP) growth rate at about 3.5 per cent in its 2018 budget.

The Economic Recovery and Growth Plan (ERGP), the government’s medium term economic blue print, had noted that the “real GDP is projected to grow by 4.62 per cent on average over the plan period of 2017 – 2020, from an estimated contraction of 1.54 per cent in 2016. Real GDP growth is projected to improve significantly to 2.19 per cent in 2017, reaching 7 per cent at the end of the plan period.”

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But the World Bank in its latest report said, “In Nigeria, the economy is projected to grow 2.1 per cent in 2018 and 1.9 per cent in 2019 (up from 0.8 per cent in 2017), reflecting improved oil prices, revenue, and production and recently introduced foreign exchange measures that contribute to better foreign exchange availability.”

The report further showed that Nigeria would be under-performing the sub-Sahara Africa group of economies which the World Bank projected would rise to 3.4 per cent in 2018, up from 2.8 per cent actual recorded in 2017, and improve slightly thereafter through the medium term to about 4.0 per cent.

Though the report did not state reasons for the Nigerian down-grade, it is likely tied to its earlier observations in previous reports that noted the adverse effects of political developments on the economies of sub-Sahara Africa.

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