World Bank predicts that Nigerian economy will grow by 2.2% during the course of 2019

NIGERIA'S economy should grow at by 2.2% during the course of 2019 according to the latest World bank economic forecast which predicts that global oil prices should stabilise at around $67 a barrel during the course of the year.


Between 1999 and 2015, Nigeria's economy grew at a rate of about 6% a year but due to a combination of a change of government, a slump in oil prices and investor fears, the country slid into recession three years ago. Since then, the economy has returned to growth but only at a rate of 1.9% as oil prices are currently around $60 a barrels compared with the $100 a barrel about five years ago.


Also, Nigeria's 2019 budget is predicated on an oil output of 2.3m barrels a day at a cost of $60 a barrel. In its Global Economic Prospects report, the World Bank predicted that economic growth across sub-Saharan Africa is expected to pick up by 3.4% in 2019, rising to an average of 3.7% in 2020/21.


According to the report, the economic growth is predicated on diminished policy uncertainty and improved investment in large economies, together with continued robust growth in non-resource intensive countries. However, it noted that external headwinds have intensified as growth among main trading partners moderates, global financial conditions tighten and trade policy uncertainty persists.


The report further stated: “Growth in Nigeria is projected to rebound to 2.2% in 2019 and 2.4% in 2020-21. These forecasts are unchanged from June and assume that oil production will recover, but peak below government targets, while a slow improvement in private demand will constrain growth in the non-oil industrial sector.”


Apart from revising down its oil price projections and warning about the uncertainties surrounding oil price trend this year, the World Bank also noted that global economic growth is expected to slow to 2.9% in 2019 from 3% in 2018, as international trade and investment weaken.  Last year, oil prices averaged $68 a barrel, slightly lower compared to the bank’s forecast from June 2018, but 30% higher than the average price of oil in 2017.


“The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress.


“Oil prices are expected to average $67 a barrel in 2019 and 2020, $2 a barrel lower than June projections, however, uncertainty around the forecast is high. This year, oil demand growth is expected to stay robust but expected slowdown in emerging market and developing economies could have a greater impact on oil demand than expected,” the World Bank report said.