IMF Forecasts 0.8% growth in Nigeria’s economy this year

Following a marked improvement in oil production, the International Monetary Fund says the Nigerian economy is expected to grow by 0.8 percent in 2017.

“Output in Nigeria is projected to grow by 0.8 percent in 2017 as a result of a recovery in oil production,” according to the latest IMF World Economic Outlook report. The report also cites sustained growth in the agricultural sector.

The report also stated that in sub-Saharan Africa; “Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016.”

A slump in commodity price in 2016 and devastating drought had affected growth in several countries in the region, resulting in 1.4 percent growth of gross domestic product (GDP).

South Africa, which was hit by slow growth in 2016 was expected to register a slight improvement of 0.8 percent, up from 0.3 percent in 2016, as the impact of devastating drought was beginning to recede and electricity capacity improved.

The continent’s most advanced economy is currently reeling from a recent downgrade to “junk” status by two credit ratings agencies, Standard & Poor’s and Fitch, something which could have an adverse impact on the economy as it is.

Angola, another regional black gold producer, which experienced zero growth in 2016, was expected to show improvement this year, thanks to the effects of economic diversification.

Although there were signs of recovery in the region, the international lender warned that the outlook remained subdued.

“Many of the largest non-resource intensive countries will find it increasingly hard to sustain growth through higher public capital spending, as they have done in the past, in the face of rising public debt and a slowing credit cycle”- IMF.

It said output growth was expected “only moderately” to exceed population growth over the forecast horizon.

Double digit inflation was forecast in several countries, including Nigeria, Angola and Ghana, following a sharp depreciation of their respective currencies in recent months.

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