The World Bank has projected a 2.4 percent economic growth for Nigeria in 2021, up from 1.8 percent recorded in 2020. The rebound, according to the Bank’s twice-yearly economic update released on Wednesday, will be driven mainly by the elevated commodity price, relaxation of stringent pandemic measures, and recovery in global trade.
It however stated that growth in the Sub-saharan Africa region is expected to remain vulnerable, below 4 percent for 2022, 2023, and 3.3 percent in 2021, given the low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery. “Nigeria, Angola, and South Africa, expected to grow by 2.4 percent, 0.4 percent, 4.6 percent respectively,” it stated.
The analysis shows that excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 percent in 2021, with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 percent, respectively. A positive trend, according to the report is that African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms, as several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia.
“Fair and broad access to effective and safe COVID 19 vaccines is key to saving lives and strengthening Africa’s economic recovery. Faster vaccine deployment would accelerate the region’s growth to 5.1 percent in 2022 and 5.4 percent in 2023—as more containment measures are lifted, boosting consumption and investment,” said Albert Zeufack, Chief Economist for Africa at the World Bank.
“Additionally, thanks to prudent monetary and fiscal policies, the region’s fiscal deficit, at 5.4 percent of GDP in 2021, is expected to narrow to 4.5 percent of GDP in 2022 and 3 percent of GDP in 2023. However fiscal discipline, combined with limited fiscal space, has prevented African countries from injecting the level of resources required to launch a vigorous policy response to COVID-19”.
“Apart from mounting fiscal pressures and rising debt levels as they implement measures for a sustainable and inclusive economic recovery, Sub-Saharan African countries are also faced with worsening impacts of climate change”, the report stated.