• Forecasts 5% for Sub-Saharan Africa
THE International Monetary Fund (IMF) yesterday hinged Nigeria’s ability to achieve an overall Gross Domestic Product (GDP) growth rate of seven per cent in 2012, on a rebound in its oil output.
“In Nigeria, non-oil GDP growth will moderate with the softer external environment and tighter macroeconomic policies. But a slight rebound in oil output will keep overall GDP growth at 7 per cent, “ the Fund stated in its October 2012 World Economic Outlook released yesterday in Tokyo, Japan, venue of the on-going World Bank/IMF Annual Meetings.
The latest forecast by the IMF, is in line with the Central Bank of Nigeria’s (CBN’s) projection that Nigeria’s Gross Domestic Product (GDP) is expected to grow by around seven per cent this year. The CBN Governor, Sanusi Lamido Sanusi had said Nigeria now has the right policy makers pushing forward reforms, which would ensure Nigeria achieved a significant rise in growth in the coming years.
The real risk in Nigeria is that of policy, adding that we have achieved an average of seven per cent growth for the last decade, and this is without steady electricity supply or adequate infrastructure,” Sanusi said early this year.
“GDP can easily move into double-digits If we implement all the things planned. There will be a major step change in growth rates in the next two to three years,” he added.
Driven by non-oil sector growth, Nigeria’s economy grew 6.28 per cent in the second quarter of this year, up slightly from 6.17 per cent in the first quarter. Historically, from 2005 until 2012, Nigeria’s GDP growth rate averaged 6.8 per cent, reaching an all time high of 8.6 per cent in December of 2010 and a record low of 4.5 percent in March of 2009.
The GDP growth rate provides an aggregated measure of changes in value of the goods and services produced by an economy.
Average daily crude oil output from the country also rose marginally to 2.38 million barrels per day (bpd) in the second quarter from 2.35 million bpd in the first quarter.
Christened, “Coping with high debt and sluggish growth,” the IMF said growth in the oil-exporting economies is projected to remain high, near six per cent in 2012, adding that increased oil production in Angola will expand its GDP by close to 6¾ per cent this year.
“In the baseline scenario, under which strains in the euro area remain contained and the global economy expands by 3¼ to 3½ per cent this year and next, growth in Sub-Sahara Africa, will continue above five per cent during 2012–13,” the Fund said.
Noting that external shocks remain elevated, the IMF advised policy makers in the region to use the window provided by strong growth to rebuild budgetary space and normalize monetary conditions to be better prepared for downside risks.
“Economic activity in sub-Saharan Africa (SSA) has expanded by more than 5 per cent in each of the past three years -continuing a decade-long run of strong performance that was only briefly interrupted by the global downturn in 2009.
Most SSA economies are participating in this solid expansion, with the notable exception of South Africa, which has been hampered by its strong linkages with Europe, as well as some countries in western Africa affected by drought and civil conflict.
“ More recently, some food importers in the region have also been hit by the sharp increase in global food prices for a few major crops -leading to higher headline inflation and widening trade imbalances – although so far with less severe effects than during the 2007 -08 food price shocks. The region’s recent growth has occurred against abackdrop of difficult external conditions, including the escalation of the euro area crisis.
“But apart from South Africa, financial spillovers from Europe to the region have been modest. Export diversification has reduced exposure to weak demand from advanced economies, and high commodity prices have supported the region’s commodity exporters and boosted investment in resource extraction.
