[EDITORIAL] IMF’s reduced 2020 growth projection
FOR Africa’s largest economy, the latest downward review of its economic growth projections for 2020 by the International Monetary Fund did not come without warning. In its 2020 Article IV Consultation on Nigeria, the Washington, DC – based institution slashed Nigeria’s Gross Domestic Product forecast from 2.5 per cent to 2.0 per cent. This is a sizeable cut, but with the lethargic pace of growth in the face of a myriad of challenges, it is an opportunity for the Maj. Gen.
Thus, economic experts argue that this mini-resurgence is connected to the rebound in oil prices. At the height of the meltdown in 2016, oil sold for $40 per barrel on the average. In 2019, it averaged $64.05pb. This boosted the GDP as the country fell short of its non-oil revenue projections. Comparatively, Nigeria attained an 11.3 per cent GDP growth in 2010, the highest in the past 10 years as oil sold for an average of $77.38pb then.
The electricity to power production is in short supply in Africa’s largest economy, oscillating between 3,000 and 5,000 megawatts. Because of tortuous port operations and reduced access to foreign exchange, it is difficult for manufacturers to produce. To avoid a shut-down, some manufacturing concerns have relocated to neighbouring West African countries.
Without infrastructure, the economy will remain in the doldrums. Therefore, the regime should build roads swiftly to aid the movement of goods and services. Privatisation is critical, but the attitude of the incumbent regime in this area is disappointing. This should change in the larger interest of the economy. In a transparent manner, the loss-making refineries should be privatised.
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