IMF increases Nigeria’s growth projection to 2.5 per cent

The International Monetary Fund (IMF) has praised Nigeria’s 2021 growth projection to 2.5 per cent.
The new projection is 1.5 per cent point higher than January’s estimate. It is also much higher than the 0.8 per cent forecast in October 2020.

The new projection is contained in the reviewed 2021 World Economic Outlook released yesterday.

From the report, Nigeria’s gross domestic product (GDP) is expected to grow by 2.3 per cent in 2022 as against the earlier projected -0.2 per cent.

The report also projected Nigeria’s rival South Africa to grow 3.1 per cent this year and two per cent in 2022.

Forecasts for Nigeria and South Africa are below Sub-Saharan’s estimated growth of 3.4 per cent and the global projection, which the international institution put at six per cent.

IMF stated: “Global prospects remain highly uncertain one year into the pandemic. New virus mutations and the accumulating human toll raise concerns, even as growing vaccine coverage lifts sentiment. Economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.

“The outlook depends not just on the outcome of the battle between the virus and vaccines—it also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.

“The upward revision reflects additional financial support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization, and the evolution of financial conditions.”

The organisation said COVID-19 would continue to exact enormous impact on sub-Saharan Africa, especially Ghana, Kenya, Nigeria, South Africa.

“Following the largest contraction ever for the region (–1.9 per cent in 2020), growth is expected to rebound to 3.4 per cent in 2021, significantly lower than the trend anticipated before the pandemic. Tourism-reliant economies will likely be the most affected,” the report noted.