New Telegraph

Nigeria’s economy to grow at 1.5% in 2021 –JPMorgan

Analysts

Despite the controversial 5 per cent Gross Domestic Product (GDP) growth rate the Nigeria Bureau of Statistic (NBS) said Nigerian economy recorded in the second quarter of 2021, JPMorgan has said that the recovery of Africa’s biggest economy from last year’s coronavirus pandemic-induced contraction could be slower than previously expected. Nigeria’s economy is likely to expand by 1.5 per cent in 2021, JPMorgan Chase Bank NA analysts including Gbolahan Taiwo and Ayomide Mejabi said in an emailed note.

 

That’s after the economy shrank 1.92 per cent last year, the most since at least 1991, according to International Monetary Fund data. That’s below the median estimate of 11 economists in a Bloomberg survey as well as the IMF and central bank’s predictions.

 

A “continued lack of foreign-exchange liquidity, underlying economic weakness, an emerging third wave of Covid-19 infections and a slow rollout of vaccines will likely slow the recovery process,” JPMorgan said.

 

The Central Bank of Nigeria (CBN) surprisingly halted the sale of foreign exchange to bureaus de change and increased supplies to banks in July, though that measure hasn’t helped ease the scarcity, reportedly due to the illegal activities of the BDC and ‘Black Market’ forex dealers.

 

Meanwhile, Nigerians have to contend with the highest inflation rate in four years, the second-highest unemployment rate on a list of 82 countries tracked by Bloomberg, and an economy that’s only just emerged from recession.

 

Recall that NBS has in it Q2 report released recently claimed that the Nigerian economy recorded a 5.01 per cent annual growth in real terms in the second quarter of 2021. Coming after the retirement of the highly respected for head of the Bureau, Mr. Yemi Kalle, the NBS said that the rise in the growth rate marked the third consecutive quarter of growth following the negative growth rates recorded in the second and third quarters of 2020.

 

The economy only recorded growth of 0.11 per cent in Q1 2021. The reported second quarter growth rate was higher than the -6.10 per cent growth rate recorded in the second quarter of 2020 and the 0.51 per cent recorded in the first quarter of 2021.

 

Africa’s biggest economy went into recession in 2020 after two quarters of economic decline as a result of the coronavirus pandemic that shut businesses and economies globally.

 

This NBS says, indicates “the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions”.

 

“The steady recovery observed since the end of 2020, with the gradual return of commercial activity as well as local and international travel, accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect,” it said

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