By Omodele Adigun with agency report
The dream of Nigeria’s growing its Gross Domestic Product (GDP) by 2.0 per cent this year may be a mirage afterall as the World Bank predicts 1.1 per cent growth for the country in 2021 and 1.8 percent in 2022. This is contained in the World Bank’s latest report entitled: “Global Economic Prospects”, released on Tuesday. which portrays weaker than the previous projections,
The Bretton Woods Institution warned that Nigeria’s economy would face severe challenges in 2021, worsened by dampened low oil prices, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence.
It predicted that the global economy would expand by 4 per cent in 2021 on the back of an initial COVID-19 vaccine rollout.
However, growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7 per cent in 2021 — 0.4 percentage point weaker than previously projected — before firming to 3.3 percent in 2022.
“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 said. In all, this reversal is projected to push tens of million more people in the region into extreme poverty cumulatively in 2020 and 2021.”
The report said a high debt burden is likely to limit the ability of many sub-saharan countries to fund post-COVID reforms.
It, however, noted that pandemic could create a momentum to implement major reforms such as removing inefficient fuel subsidies, liberalising the telecommunication sector, and promoting competition in the energy sector.
“The pandemic caused an estimated 6.1 per cent fall in per capita income last year and it is expected to lead to a further 0.2 per cent decline in 2021.