The World Bank has raised Nigeria’s 2021 growth forecast to 2.4 per cent from the 1.8 per cent it projected for the country in June. The bank, which stated this in the latest edition of its Africa’s Pulse report titled, “Climate Change Adaptation and Economic Transformation in Sub-Saharan Africa,” released yesterday, said its upward revision of Nigeria’s growth forecast for this year is hinged on accelerated growth in the country’s service sectors.
In its Global Economic Prospects report released in June, the World Bank had revised Nigeria’s 2021 growth forecast by 0.7 per cent to 1.8 per cent from the 1.1 per cent it projected for the country in January.
The International Monetary Fund (IMF), in an update to its World Economic Outlook (WEO), in July retained its 2.5 per cent forecast for Nigeria’s economic growth in 2021. Still, at 2.4 per cent, the World Bank’s latest growth forecast for Nigeria this year is lower than its sub- Saharan growth forecasts of 3.3per cent in 2021 and 3.5per cent in 2022.
The bank stated: “In Sub-Saharan Africa, the economy is set to expand by 3.3 per cent in 2021, one percentage point higher than the forecast of the April 2021 Africa’s Pulse, with projections for 2022 and 2023 just below four per cent. “Economic recovery in sub-Saharan Africa remains timid and fragile as the slow pace of vaccination continues to expose the region to emerging strains of coronavirus, holding back economic performance. While our growth forecast is on the upper bound of the interval projected in the April 2021 Africa’s Pulse, the rebound remains weaker than growth in advanced economies and emerging markets, reflecting subdued investment in sub-Saharan Africa.
“At the current pace, it will take some time for many countries in sub-Saharan Africa to regain their pre-COVID- 19 levels of activity. And a return to pre-pandemic output trends may take longer. The economic damage from the pandemic is expected to be protracted.” It further stated: “Growth in economic activity for the region is projected at 3.5 per cent in 2022 and 3.8 per cent in 2023. However, these projections are subject to substantial uncertainty around the pace of vaccination.
“Within Africa, recovery is also multi-speed. Angola, Nigeria, and South Africa, the largest economies in the region, are expected to emerge from the 2020 recession, yet at different paces. Angola is expected to grow by 0.4 per cent in 2021, after five consecutive years of recession…. Nigeria is expected to grow by 2.4 percent in 2021, supported by the service sector….
South Africa is projected to grow by 4.6 per cent in 2021, reflecting better performance in services, industry, and somewhat agriculture.” Noting that public debt levels across Sub-Saharan African countries experienced a steep increase, a trend that, it said, predated the COVID-19 crisis, the World Bank stated: “ On average, the general government gross debt is projected at 71 percent of gross domes-tic product (GDP) for 2021, an increase of 30 percentage points of GDP since 2013.” It warned that “increased funding on commercial terms, partially reflecting the recent surge in Eurobond issuances, has raised the exposure of Sub-Saharan African countries to interest rate, exchange rate, and rollover risks.”