World Bank projects growth for Nigeria in 2021 despite COVID-19 risk
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NIGERIA’S economic growth rate is expected to kickstart 2021 by 1.1 percent after a turbulent contraction of 4.1 percent in 2020.
This was disclosed in the World Bank’s Global Economic Prospects 2021 report entitled ‘Global economy to expand by four per cent in 2021, vaccine deployment and investment key to sustaining the recovery.’
Though Nigeria’s gross domestic product (GDP) dropped last year, the report projected the economy would likely resume at 1.1 per cent in 2021 and edge up to 1.8 per cent in 2022.
“Activity is nevertheless anticipated to be dampened by low oil prices, OPEC quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence,” the report said.
“Private consumption prospects will be weighed down by lost incomes and higher precautionary saving among non-poor households, as well as lower remittances and the depletion of savings among poor and unemployed households amid inadequate social safety nets,” the report further said.
It also highlighted that the Sub-Saharan Africa region contracted by an estimated 3.7 percent in 2020 as COVID-19 pandemic and associated lockdowns disrupted economic activities.
As a result, per capita income shrank by 6.1 per cent in 2020, setting average living standards back by at least a decade in a quarter of Sub-Saharan African economies.
The worst-hit countries had large domestic outbreaks and were heavily dependent on travel, tourism and commodity exports, particularly oil.
“In Nigeria and South Africa, output fell sharply last year. In South Africa, economic activity was on weak footing before COVID-19, the output is estimated to have fallen by 7.8 per cent last year,” the report revealed.
An expectation of weak growth momentum reflected the lingering effects of the pandemic and the likelihood that some mitigation measures would be needed to remain in place.
“The global economy is expected to expand four per cent in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year,” it stated.
“A recovery, however, will likely be subdued, unless policymakers move decisively to tame the pandemic and implement investment-enhancing reforms.”
Although the global economy was growing again after a 4.3 percent contraction in 2020, the World Bank said the pandemic had caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period.