Inspite of efforts by Nigeria’s government to activate the right quality of economic growth to make a dent on poverty and boost quality of life, this realization comes as the World Bank Group in its latest projection that Nigeria’s economy will grow by 2.1 percent in 2020 while the West African Economic and Monetary Union expected to stabilise at 6.4 percent. The growth prediction which is contained in the global lenders January 2020 Global Economic Prospects highlighted that Nigeria’s economy will also grow by 2.1 per cent in 2021 and 2023 which is way behind the government’s expected projection of 3.5 percent.
Nigeria is not making the right impact on all indices because the country has not been able to achieve real life changing growth since it exited economic recession in 2017, instead, poverty and other indices on the human development indices have deteriorated making Nigeria the country with the highest number of people living below the poverty line estimated at close to 100 million, and also the number with the highest number of out of school children in the world.
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To make visible and tangible impact on the lives of the people, the Nigerian economy would need to break above 5 per cent growth rates inching towards a double digit growth rate between now and the next five years because the damages done by the recession, growing insecurity, and massive job losses in the last two years demands something much more.
According to the World Bank, Nigeria’s macro economic framework was not “conducive to confidence”, noting that it was characterised by multiple exchange rates, foreign exchange restrictions and persistent inflation. This the Bank said will not be able to help achieve the level of growth impact needed to make the right impact on the people.
Speaking on the development, the World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu, urged policy makers in Nigeria and other developing economies to undertake structural reforms that boost broad-based growth. “Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth,” he added.
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Also, World Bank Prospects Group Director, Ayhan Kose, said policy improvements would help to minimise the risks associated with the current debt wave in a fragile global economy. According to the report, downward risks persist, even as investment and trade gradually recover from significant weakness recorded in 2019. Growth in Sub-Saharan Africa is expected to peak at 2.9 per cent in 2020, the bank further projected.
However, the projected growth in the sub-region will depend on improvement in investor confidence in some large economies, ease of energy bottlenecks, rise in oil production and improved agricultural commodity exports. The bank further predicted that growth among advanced economies would decline to 1.4 per cent in 2020.
However, growth in emerging markets and developing economies is expected to accelerate to 4.1 per cent in 2020. In South Africa, growth is expected to pick up to 0.9 per cent, while accelerating to 1.5 per cent in Angola.The projection was based on implementation of reforms in both countries, as well as improvement in private investment.
Kenya is expected to record six percent growth rate in the same period, according to the World Bank. The bank reported a loss of momentum in economic recovery in Sub-Saharan Africa in 2019, as growth moderated to 2.4 per cent. Issues such as uncertain policies, falling commodity prices, fragile domestic markets and lower demand by major trading partners were identified as reasons for the loss of momentum in economic recovery in the sub-region. The report said, “In Angola, Nigeria, and South Africa – the three largest economies in the region – growth was subdued in 2019, remaining well below historical averages and contracting for a fifth consecutive year on a per capita basis.”
The report tied the growth in Sub-Saharan African countries to the activities of major trading partners such as China, the European Union member states and the United States. A major decline in demand from these trading partners would substantially lower export revenues and investment, the World Bank said. Nigeria stands to lose if demands for crude oil drops below the government’s budgeted threshold.
It also noted that a faster-than-expected slowdown in China would cause a sharp fall in commodity prices. According to the report, a broad-based rise in government debt had led to sharp increases in interest burdens, crowding out non-interest expenditure and raising concerns about debt sustainability. Insecurity would also affect growth in the sub-region in 2020, the Bank observed.
According to the report, conflicts, and insurgencies would weigh on economic activity and food security in several economies.Extreme weather would also pose a significant downside risk to economic activity due to the disproportionate role played by agriculture in many economies in the region, the report added
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry