JANUARY 12, 2017 – The World Bank has corroborated projections by the Federal Government that Nigeria will exit recession this year.
Nigeria officially got into recession in the second quarter of 2016. In its January 2017 Global Economic Prospects report released yesterday, the World Bank forecast that Nigeria will grow at one per cent. It also said the global economy will accelerate moderately to 2.7 per cent in 2017.
According to the report, “Sub-Saharan African growth is expected to pick up modestly to 2.9 per cent in 2017 as the region continues to adjust to lower commodity prices.
Growth in South Africa and oil exporters is expected to be weaker, while growth in economies that are not natural-resource intensive should remain robust.
“Growth in South Africa is expected to edge up to a 1.1 per cent pace this year. Nigeria is forecast to rebound from recession and grow at a 1 per cent pace.
Angola is projected to expand at a 1.2 per cent pace.” The Minister of Finance, Mrs. Kemi Adeosun, and Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, had both said that the country will return to growth this year.
The report stated that fiscal stimulus in major economies – particularly in the United States – could generate faster domestic and global growth than projected, although rising trade protection could have adverse effects.
“Growth in emerging market and developing economies as a whole should pick up to 4.2 per cent this year from 3.4 per cent in the year just ended amid modestly rising commodity prices” the report predicted.
However, the World Bank noted that the global economy’s outlook is clouded by uncertainty about policy direction in major economies, adding that a protracted period of uncertainty could prolong the slow growth in investment that is holding back low, middle, and high income countries.
It further stated that emerging market and developing economy commodity exporters are expected to expand by 2.3 per cent in 2017 after an almost negligible 0.3 per cent pace in 2016, as commodity prices gradually recover and as Russia and Brazil resume growing after recessions.
In contrast, the bank stated that commodity importing emerging market and developing economies should grow at 5.6 per cent this year, unchanged from 2016. China is also projected to continue an orderly growth slowdown to a 6.5 per cent rate.
“However, overall prospects for emerging market and developing economies are dampened by tepid international trade, subdued investment, and weak productivity growth,” the World Bank stated.
Interestingly, it stated that among advanced economies, growth in the United States is expected to pick up to 2.2 per cent, as manufacturing and investment growth gain traction after a weak 2016.
Commenting on the report, World Bank Group President, Jim Yong Kim, said: “After years of disappointing global growth, we are encouraged to see stronger economic prospects on the horizon.
Now is the time to take advantage of this momentum and increase investments in infrastructure and people.
This is vital to accelerating the sustainable and inclusive economic growth required to end extreme poverty.”