JP Morgan Analysts See Nigeria’s Economy Growing by less than 2% in 2021

Following the devastating economic effects of the Coronavirus pandemic, Nigeria’s economy shrunk by 1.92% in 2020; the most it had ever shrunk since 1991. Since this development, analysts have been projecting that the economy would bounce back soon. Unfortunately, this seems to be happening a little slower than anticipated.

Two JP Morgan Chase analysts (Gbolahan Taiwo and Ayomide Mejabi) who spoke to Bloomberg recently, said the country’s economy could only expand by 1.5% in 2021. They explained in an emailed response that the country’s “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”.

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Note that of all the factors enumerated by the analysts, the foreign exchange crisis is perhaps the biggest challenge facing the country. The Central Bank of Nigeria has been grappling to bring the situation under control but all to no avail. The latest actions taken by the apex  bank was to halt sale of forex to bureau de change operators across the country. The regulator has also declared war against black market sellers of dollars, threatening to prosecute anyone facilitating all forms of dollar transactions in the parrallel market. Unfortunately, these moves haven’t quite helped matters.