The International Monetary Fund (IMF) has said that economic growth in Nigeria due to rise in commodity prices will stimulate growth in other Sub-Saharan African economies. The IMF World Economic Outlook update released yesterday showed that Sub-Saharan Africa has Nigeria to praise for better economic growth prospects next year. The Fund saids the region’s economy will likely expand 3.8 per cent in 2019 as against a 3.7 per cent prediction in April.
The upgraded forecast “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. Gross Domestic Product in Nigeria will rise 2.3 per cent, it said, lifting its estimate from 1.9 per cent in April.
Nigeria’s economy is recovering from the worst contraction in 25 years in 2016, which was caused by lower oil prices and output and shortages of foreign exchange to import raw materials. The IMF held its predictions for South Africa’s economy, saying it will expand 1.5 per cent this year and 1.7 per cent the next.
“Despite the weaker-than-expected first-quarter out-turn in South Africa, the economy is expected to recover somewhat over the remainder of 2018 and into 2019 as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the fund said.
South Africa, the continent’s most-industrialized economy, hasn’t grown at more than two per cent a year since 2013. GDP shrank the most in almost a decade in the first quarter as former President Jacob Zuma handed the reins to Cyril Ramaphosa. Zuma spent close to nine years in power, during which time the nation lost its investment-grade credit rating and policy uncertainty and unemployment increased.
Nigeria and South Africa’s economies account for about half of the region’s GDP. Further analysis of the report showed that amid rising tensions over international trade, the broad global expansion that began roughly two years ago has plateaued and become less balanced.