From Uche Usim, Abuja
The International Monetary Fund (IMF) yesterday described the Nigerian economy and those of other countries in Sub-Saharan Africa as fragile as growth slowed sharply in 2016, averaging 1.4 per cent, considered the slowest in two decades.
Speaking at the launch of the Regional Economic Outlook, the Director of Africa Department, Abebe Aemro Selassie, said the deteriorated outlook was partly due to delayed and limited policy adjustments with an ensuing increase in public debt, declining international reserves and pressures on financial system.
“The countries hardest hit by the oil price shock like Angola, Nigeria and the countries of the Central African Economic and Monetary Community (CEMAC) are still struggling to deal with unusually large terms-of-trade shock and implied budgetary revenue losses.
The pains from this shock continue to do damages to these economies, with the risk of generating even deeper difficulties both within and across borders if unaddressed”, he said.
Selassie said additional policy actions are therefore urgently needed to address growing imbalances and ensure macroeconomic stability.
In her remarks, the Finance Minister, Kemi Adeosun, said the recently-launched Economic Recovery and Growth Plan (ERGP) will be fully implemented as a major revival programme for the economy.
“We are focusing on providing stimulus for growth. We are getting private sector involved to boost funding for major projects. We are also ensuring more Nigerians are within the tax net as it remains another major non-oil revenue earner”, she said.
But according to the IMF forecast economic growth in sub-Saharan Africa would recover slightly to 2.6 per cent this year after a more than two-decade low in 2016 as commodity exporters faced lower prices.
The slight rebound will be driven by a recovery in oil production in Nigeria, higher public spending ahead of elections in Angola, and the fading of drought effects in South Africa, the IMF said in its regional economic outlook.
But the resource-rich Nigeria, Angola and Central Africa’s six-nation CEMAC bloc are still struggling to deal with the losses caused by low oil prices, the IMF said.
“The overall weak outlook partly reflects insufficient policy adjustment,” said Selassie, adding that this was holding back investment.
In non-oil producers such as Ivory Coast, Kenya, and Senegal, growth is expected to remain strong at over 5 percent but vulnerabilities such as rising public debt are starting to emerge, it said.
For a decade, sub-Saharan African economic growth of around 5 per cent drew in foreign investment but that is drying up with economic growth now barely keeping up with population growth.
The World Bank also expects growth of 2.6 percent this year, expanding to 3.2 percent in 2018 and 3.5 percent a year later.