World Bank applauds Nigeria’s political maturity

Nigeria has set a great example of political maturity in Africa, according to the World Bank which, yesterday, lowered Sub-Saharan Africa’s 2015 growth expectations to 4.0 percent from 4.5 percent in 2014 in a new report Africa’s pulse released on Monday.

The World Bank said it also expected increased inflow of Foreign Direct Investment (FDI) into Nigeria as a result of the peaceful conduct of just concluded polls.

“We all saw the great example of political maturity in Africa from the election results in Nigeria where the incumbent agreed to concede defeat after an election that was adjudged most free and fair, even though there were some irregularities in some places.

There is substantial progress from previous elections and transition of power from a party to another and this shows that if Nigeria can do it, hopefully other countries can do it too,” Francisco Ferreira, the World Bank’s Chief Economist for Africa said in a video conference to release the African Pulse.

The World Bank , in its Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects, noted the anticipated subdued sub Saharan growth largely reflects the fall in the prices of oil and other commodities. Sub-Saharan Africa had been a net exporter of primary commodities- with oil being the most important commodity traded in the region, followed by gold and natural gas, the report stated.

The 2015 forecast is below the 4.4 percent average annual growth rate of the past two decades and well short of Africa’s peak growth rates of 6.4 percent in 2002-2008. Excluding South Africa, the average growth for the rest of Sub-Saharan Africa is forecast to be around 4.7 percent.

The World Bank is optimistic that although the Nigerian  economy will suffer this year on soft oil concerns, growth will rebound in 2016 and beyond, driven by a relatively diversified economy, and a buoyant services sector.

Low oil prices will continue to weigh down prospects of less diversified oil exporters such as Angola and Equatorial Guinea. In several oil-importing countries, such as Cote d’Ivoire, Kenya and Senegal, growth is expected to remain strong. In Ghana, high inflation and fiscal consolidation will still weigh on growth.

South Africa’s growth, however, will continue to be curtailed by problems in the electricity sector.

Over ninety percent of the total exports of eight major oil-exporting countries come from the three biggest exports of each country, which represent nearly 30 percent of their GDP. As a result, terms of trade are declining widely among most countries in the region.

But “despite strong headwinds and new challenges, Sub-Saharan Africa is still experiencing growth. And with challenges come opportunities. The end of the commodity super-cycle has provided a window of opportunity to push ahead with the next wave of structural reforms and make Africa’s growth more effective at reducing poverty,” says Makhtar Diop, World Bank Vice President for Africa.

Fiscal policy stance is also expected to remain tight throughout 2015 in most net oil-exporting countries across the region, as countries take measures to rein in spending in light of anticipated lower revenues.

ONYINYE NWACHUKWU