World Bank forecasts that Nigeria's economy will grow by 1.2% during the course of 2017 as crude output rises

NIGERIA has been forecast to enjoy 1.2% economic growth during the course of 2017 by the World Bank as a result of an improved economic outlook brought about by the increase in crude oil production.

 

For the first time in about 20 years, Nigeria suffered a recession during the course of 2016 as a result of falling oil prices, militancy in the Niger Delta, investors pulling their capital out of the country and foreign direct investment slowing down. Since 1999, when Nigeria returned to democratic rule, the country has enjoyed an average annual gross domestic product (GDP) growth of about 7% but suffered negative growth for the first time last year.

 

Yesterday, the World Bank upgraded its forecast for Nigeria’s economic growth to 1.2% for 2017, citing improved oil production due to decreased militant activities. In its June 2017 Global Economic Prospects report, the World Bank said the Purchasing Managers’ Index for manufacturers returned to expansionary territory in April, indicating growth in the sector after contraction in the first quarter.

 

A World Bank spokesman said: “Nigeria is forecast to go from recession to a 1.2% growth rate in 2017, gaining speed to 2.4% in 2018. In Nigeria, militants’ attacks on oil pipelines decreased and the economic recession is receding.

 

"In the first quarter of 2017, GDP fell by 0.5% year-on-year compared with a 1.7% contraction in the fourth quarter of 2016. Oil exports are rebounding in Nigeria on the back of an uptick in oil production from fields previously damaged by militants’ attacks and mining companies across the region are resuming production and exports."

 

In addition, the World Bank also projected 2.6% economic growth for the Sub-Saharan African region. It stated that growth in sub-Saharan Africa is forecast to pick up to 2.6% in 2017 and to 3.2% in 2018.

 

This is predicated on moderately rising commodity prices and reforms to tackle macroeconomic imbalances. However, per capita output is projected to shrink by 0.1% in 2017 and to increase to a modest 0.7% growth pace over 2018/19.

 

At those rates, growth will be insufficient to achieve poverty reduction goals in the region, particularly if constraints to more vigorous growth persist according to the World Bank. Growth in South Africa is projected to rise to 0.6% in 2017 and accelerate to 1.1% in 2018 as the growth in non-resource-intensive countries is anticipated to remain solid, supported by infrastructure investment, resilient services sectors, and the recovery of agricultural production.

 

Ethiopia's economy is forecast to expand by 8.3% in 2017, Tanzania's by 7.2%, Ivory Coast's by 6.8%, and Senegal's by 6.7%. In addition, the World Bank forecasts that global economic growth will strengthen to 2.7% in 2017 as a pick-up in manufacturing and trade, rising market confidence and stabilising commodity prices allow growth to resume in commodity-exporting emerging market and developing economies.

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