The contraction in Nigeria’s economy is projected to drop to about 0.6 per cent in 2018 and further to about 0.1 per cent in 2019, the African Development Bank (AfDB), said in its 2018 African Economic Outlook Report published on Wednesday.
In sub-Saharan Africa, the report noted the reduced growth from 3.8 per cent in 2016 to 3.2 per cent 2017, but projected an annual increase in growth to more than 4 per cent in 2018 and 2019.
The report stated that per capita income in sub-Saharan Africa, which rose by about 1.1 per cent in 2017, was projected to rise by about 1.5 per cent in 2018 and a further 1.8 per cent in 2019.
Nigeria successfully pulled out of recession in the second quarter of 2017 after five consecutive quarters of contraction since the first quarter of 2016.
The country’s revised Gross Domestic Product, GDP, which is the aggregate value of goods and services over a period, grew by 0.55 per cent (year-on-year) in real terms.
However, the report said the chance for Nigeria’s economy to grow in 2018 depended on the faithful implementation of the Economic Recovery and Growth Plan, ERGP, by the federal government.
The report provided short-to-medium term forecasts on key macroeconomic indicators and analysis on the state of socio-economic challenges and progress in all 54 regional member countries.
Noting that Nigeria still faced significant challenges in the areas of “foreign exchange shortages, disruptions in fuel supply, power shortages, and insecurity in some parts of the country”, the ERGP holds the promise of weaning the economy from oil as its mainstay.
The ERGP is a strategic plan to restore growth of the economy, invest in the people, and build a globally competitive economy by 2020.
The plan focuses on some priority sectors, namely agriculture, manufacturing, solid minerals, ICT, financial services, tourism and creative industries, construction and real estate, and oil and gas.
With global oil prices and Nigeria’s oil production fast recovering in recent times, the report projected it would help drive growth and provide fiscal space as the government pursues ongoing structural reforms to diversify the economy.
Part of the key findings and recommendations based on the analysis of the report showed many African economies would be better placed to cope with harsh external conditions than they were in the past two decades.
Despite recent recovery of oil easing slightly in recent times to about $70 per barrel, the report said countries in Africa still faced major macroeconomic challenges.
Besides, infrastructure investment drive in the region, financed largely by external borrowing, required careful monitoring to ensure that revenue streams were strong enough to meet the debt obligations when they fall due.