World Bank is expecting Nigeria’s economy to grow by 2.2 percent in 2019, assuming that oil production will recover and a slow improvement in private demand will constrain growth in the non-oil industrial sector.
The current growth projection by World Bank shows a 0.1 percentage point compare to 2.1 percent forecast in June 2018.
Reacting to the development, Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited, said, “We have to look at our current rate and those factors that will propel 2.2 percent growth. Given the size of the economy and stage of development, it is not out place for the country to grow at that rate.
“We need a stable political environment, a shift in economic policy for us to achieve the 2.2 percent and then we need stable oil prices above the $60 range. It is not an impossibility, economy has grown at much higher rate that.
“For me it is an indication that something is wrong if our economy is projected to grow at 2.2 percent when we should be growing above our population growth rate. The key thing is that any growth rate below the population growth rate will not address the poverty crisis and unemployment rate we have in the country.”
Growth in sub-Saharan Africa is expected to accelerate to 3.4 percent in 2019, due to improved investment in large economies together with continued robust growth in non-resource intensive countries.
The World Bank report stated in its annual Global Economic Prospects published on Wednesday, that per capita growth is forecast to remain well below the long-term average in many countries of the region, yielding little progress in poverty reduction.
Ayodele Akinwunmi, head, research, FSDH Merchant Bank Limited said, If the growth projection is higher than 2018, it shows improvement which is good “but should we be growing at 2.2 percent when our population is alost 3 percent – the answer is no. If we fix security challenges in agriculture, it can do 3 percent. We need to grow to about 5 to 6 percent for us to have an expansion in economy that will be able to take the unemployed youth in the country.
“We need to resolve the security challenge in the country, partner with private sector to improve infrastructure, ensure there is adequate legislation for commercial transactions and ensure that bottlenecks to importation and exportation of goods are removed. Once we do that, trade will flow, economic activities will boom, we will have growth and people will invest in Nigeria.”
Global economic growth is projected to soften from a downwardly revised 3 percent in 2018 to 2.9 percent in 2019 amid rising downside risks to the outlook, the World Bank said on Tuesday. International trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures.
Growth among advanced economies is forecast to drop to 2 percent this year, the January 2019 Global Economic Prospects says. Slowing external demand, rising borrowing costs, and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies. Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2 percent this year.
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead”, said World Bank Chief Executive Officer Kristalina Georgieva. “As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardized. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies.”
The upswing in commodity exporters has stagnated, while activity in commodity importers is decelerating. Per capita growth will be insufficient to narrow the income gap with advanced economies in about 35 percent of emerging market and developing economies in 2019, with the share increasing to 60 percent in countries affected by fragility, conflict, and violence.
A number of developments could act as a further brake on activity. A sharper tightening in borrowing costs could depress capital inflows and lead to slower growth in many emerging market and developing economies. Past increases in public and private debt could heighten vulnerability to swings in financing conditions and market sentiment. Intensifying trade tensions could result in weaker global growth and disrupt globally interconnected value chains.
