Nigerian economy is doing badly – IMF

Growth prospects in Africa are hindered by poor economic development in Nigeria, South Africa and Angola, the International Monetary Fund (IMF) said.

The Breton Woods institution, which spoke at the IMF / World Bank Annual General Meeting in Bali, Indonesia, also revised its 2014 growth outlook for Nigeria to 2.18. % to 1.9%.

Speaking to reporters, deputy director of research at the IMF in Bali, Gian Maria Milesi-Ferretti, said the continent’s largest economies are slowing economic development in Africa because of poor growth rates.

He said; “Nigeria’s growth, 1.9% this year; 2.3 next year. South Africa, only 0.8% this year; Angola, contracting 0.1% this year. Thus, overall – more than three per cent this year, nearly four per cent next year – is despite the largest economies in the continent doing poorly.

“The continent could do much better if these economies are built on a stronger foundation, particularly South Africa and Nigeria because they are really large and affect a number of neighbouring countries.”

In its report on the World Economic Outlook, released in July, the IMF predicted that the Nigerian economy would grow by 2.1 per cent in 2018 and 2.3 per cent in 2019.

Also on Tuesday, Nigeria’s inflation was expected to rise to 13.5 per cent next year.

After 18 consecutive months of decline, the country’s inflation rate reached 11.23% in August, against 11.14% in July, announced last month by the National Bureau of Statistics.

The IMF, in the WEO report, said that inflationary pressures in sub-Saharan Africa had generally eased, with annual inflation falling to 8.6 per cent in 2018 and 8.5 per cent in 2019, compared to 11 per cent in 2017.

It noted that in South Africa, inflation had moderated from 5.3 per cent in 2017 to 4.8 per cent, thanks to the easing of drought conditions, “but is expected to edge back to 5.3 per cent in 2019 as temporary disinflationary effects subside. ”

The Washington-based fund said that in Nigeria and Angola, tighter monetary policy and moderation in food prices have helped to reduce inflation.

“In Nigeria, inflation is projected to fall to 12.4 per cent in 2018 from 16.5 per cent in 2017, and to rise to 13.5 per cent in 2019. In Angola, inflation is projected to fall to 20.5 per cent in 2018 from 29.8 per cent in 2017, and to decline further to 15.8 per cent in 2019,” it added.

According to the WEO report, growth is on the rise for sub-Saharan Africa, with the region’s average growth expected to rise to 3.1 per cent in 2018 (from 2.7 per cent in 2017) and 3.8 per cent in 2019.

The IMF said, “The growth forecast for 2018 is 0.3 percentage point lower than the April 2018 WEO forecast. The acceleration relative to 2016–17 reflects a more supportive external environment, including stronger global growth, higher commodity prices, and improved capital market access, following efforts to improve fiscal balances in the aftermath of the commodity price slump.

“Growth performance varies, however, across countries. About half of the expected pickup in growth between 2017 and 2018 reflects the growth rebound in Nigeria. Nigeria’s growth is projected to increase from 0.8 per cent in 2017 to 1.9 per cent in 2018 and 2.3 per cent in 2019 (0.4 percentage point higher than in the April 2018 WEO for 2019), buoyed by the impact of recovering oil production and prices.

“In Angola, the second largest oil exporter in the region, real GDP is expected to decline by 0.1% in 2018, after a contraction of 2.5% in 2017, but is expected to increase by 3.1% in 2019.”