Analysts at Coronation Asset Management Ltd have predicted a less severe contraction for Nigerian economy in 2020 compared with projections by the World Bank and the International Monetary Fund(IMF). In a report obtained by New Telegraph yesterday, the analysts noted that althoug the Bretton Woods institutions have an excellent track record of forecasting Nigeria’s Gross Domestic Product (GDP), recent official statistics suggest that their latest growth estimates for the country’s economy in 2020, may be too gloomy.
The analysts stated: “The World Bank recently published its Global Economic Prospects for January 2021, and we were surprised to find an estimate that Nigerian GDP had declined by 4.1 per cent, year-on-year, during 2020. We think that this is too pessimistic. Recent data suggests that the Nigerian economy is stronger than this.
“One factor that impresses us is the reduction in the rate of economic decline during Q3’20. The headline GDP rate slowed to negative 3.62 per cent y/y in Q3 from 6.10 per cent y/y in Q2.
And the rate of contraction in the non-oil economy slowed to negative 2.51 per cent in Q3 from 6.05 per cent in Q2. In fact, the headline rate improved despite the inclusion of the Oil & Gas sector whose development worsened from negative 6.63 per cent y/y in Q2 to negative 13.89 per cent in Q3. “The rate of contraction was lower in Q3 than they had been for Q2 in the following three sectors (among the major sectors): Trade; Manufacturing; Real Estates. These account for 28.4 per cent of GDP. “