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Nigeria’s confusion is center stage as World Bank downgrades its 2019 GDP growth projection

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Nigeria’s confusion is center stage as World Bank downgrades its 2019 GDP growth projection


The World Bank is projecting a 2.1% GDP growth for Nigeria in 2019, adding that “growth in Nigeria is anticipated to edge up to 2.2% in 2020.”

Why this matters:  The projection by the bank in its latest Global Economic Prospects report is 0.1% less than what it originally projected for Nigerian. Recall that in January, the World Bank projected a 2.2% growth for Nigeria in 2019 based on recovery in oil production and improved private consumption.

However in the new report, the Bank said that Nigeria’s “recovery in oil production has fallen short of expectations, as policy uncertainty constrains investment in new capacity, while weak domestic demand amid a challenging business environment has dampened non-oil growth.”

Also note that this projected GDP growth rate also falls below the Nigerian government’s projection of  3.01% – as contained in the 2019 budget.

Bottomline: The world is getting mixed vibes from Nigeria. Key economic appointments into the new administration (when they eventually come) might make things clearer. On one hand there have been recent reports of top cabinet officials announcing ‘under consideration’ policies such as petroleum subsidy removal and trade liberalization — while on another — there is the provision of funds for subsidy in the approved 2019 budget.

Furthermore, the reappointment of Godwin Emefiele as Central Bank Governor would mean pretty much expecting the same less than optimistic economic outlook of the past five years.

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