Nigeria’s real Gross Domestic Product (GDP) growth will expand by 2.2 per cent in 2019, the World Bank said in its annual Global Economic Prospects published yesterday, slightly upgrading the country’s projected growth rate from 2.1 per cent in June 2018.
The Bank also said growth in Sub-Saharan Africa would increase to 3.4 per cent in 2019, due to improved investment in large economies together with continued robust growth in non-resource intensive countries.
“Per capital growth is forecast to remain well below the long-term average in many countries, yielding little progress in poverty reduction.
“Growth in Nigeria is expected to rise to 2.2 per cent in 2019, assuming that oil production will recover and a slow improvement in private demand will constrain growth in the non-oil industrial sector.
“Angola is forecast to grow 2.9 per cent in 2019 as the oil sector recovers as new oil fields come on stream and as reforms bolster the business environment.
“South Africa is projected to accelerate modestly to a 1.3 per cent pace, amid constraints on domestic demand and limited government spending,” the Bank said.
On the risk to the region’s growth, the World Bank stated that escalated trade tensions between the United States and China could impact negatively on the region.
“Faster than-expected W of advanced-economy monetary policy could result in sharp reductions in capital inflows, higher financing costs and abrupt exchange-rate depreciation.
“Increased reliance on foreign currency borrowing has heightened refinancing and interest rate risk in debtor countries,” the Bank noted.
It said domestic risks in particular, remained elevated, that political uncertainty and a concurrent weakening of economic reforms could continue to weigh on the economic outlook in many countries.
“In countries like Mozambique, Nigeria, and South Africa holding elections in 2019, domestic political considerations could undermine the commitments needed to rein in fiscal deficits, especially where public debt levels are high and rising,” the World Bank said.
The Bank downgraded global economic growth from 3 percent in 2018 to 2.9 percent in 2019 due to trade tensions, rising borrowing costs and persistent policy uncertainties.
In its World Economic Outlook (WEO) Update released in July 2018, the International Monetary Fund (IMF) upgraded Nigeria’s 2019 GDP growth forecast to 2.3 per cent, citing improved crude oil prices.
The 2019 GDP growth forecast of 2.3 per cent the Fund announced for Nigeria was 0.4 percentage points higher than the 1.9 per cent it announced in April last year.
The IMF, which retained its GDP growth forecast of 3.4 per cent for Sub-Saharan Africa in 2018, upgraded its forecast for the region for 2019 to 3.8 per cent, from 3.7 per cent announced last April, citing rise in commodity prices.
The IMF stated: “The recovery in Sub-Saharan Africa is set to continue, supported by the rise in commodity prices. For the region, growth is expected to increase from 2.8 per cent in 2017 to 3.4 percent this year (2018), rising further to 3.8 percent in 2019 (0.1 percentage point higher for 2019 than forecast in the April WEO). The upgraded forecast reflects improved prospects for Nigeria’s. Its growth is set to increase from 0.8 per cent in 2017 to 2.1 per cent in 2018 and 2.3 per cent in 2019 (0.4 percentage point higher than in the April WEO for 2019) on the back of an improved outlook for oil prices.”
It would be recalled that the Federal Government’s 2019 budget proposals put expected Real GDP growth for this year at 3.01 per cent.