By Azuka Christopher
WED 06 JAN, 2021-theGBJournal- Growth in Nigeria is expected to resume at 1.1% in 2021, markedly weaker than previous projections-and edge up to 1.8 percent in 2022, as the economy faces severe challenges, according to the World Bank in its January Global Economic Prospects report.
The Bank said, ‘’activity is nevertheless anticipated to be dampened by low oil prices, OPEC quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence.’’
Activity is expected to be dampened by low oil prices, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence.
Moreover, private consumption prospects will be weighed down by lost incomes and higher precautionary saving among nonpoor households, as well as lower remittances and the depletion of savings among poor and unemployed households amid inadequate social safety nets
The report which also highlighted latest forecast for the sub-Saharan Africa projected a 3.3% growth rebound for South Africa and says an expectation of weak growth momentum reflects the lingering effects of the pandemic and the likelihood that some mitigation measures will need to remain in place.
‘’In Nigeria and South Africa, output fell sharply last year,’’ the Bank noted.
Nigeria’s economy is estimated to have contracted 4.1% in 2020, 0.9 percentage point more than previously projected, as the effects of the pandemic impacted economic activity in all sectors. Agriculture growth slowed amid difficulties in transporting inputs and products to markets, while falling oil sector activity reflected the effects of weaker international prices and OPEC quotas.
In South Africa, where economic activity was on weak footing before COVID-19, output is estimated to have fallen 7.8% last year. The country suffered the most severe outbreak of the pandemic in the region and underwent strict lockdowns that brought the economy to a standstill.
Meanwhile, growth in the Sub-Saharan Africa region is forecast to rebound moderately to 2.7% in 2021. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually, in line with the rebound in activity among major trading partners.
The resumption in activity in major advanced and emerging economies and key trading partners of the region (Europe, China, US) is chiefly underpinned by positive news on vaccine development and rollout as well as new rounds of fiscal stimulus, the World said.
‘’Expectations of a sluggish recovery in Sub-Saharan Africa reflect persistent COVID-19 outbreaks in several economies that have inhibited the resumption of economic activity. The pandemic is projected to cause per capita incomes to decline by 0.2% this year, setting Sustainable Development Goals (SDGs) further out of reach in many countries in the region. This reversal is expected to push tens of millions more people into extreme poverty over last year and this year.’’