IMF Worried Over Nigeria, South Africa’s Economic Growth

IMF Worried Over Nigeria, South Africa’s Economic Growth

The International Monetary Fund (IMF) has said that Nigeria and South Africa would continue to draw back the economic growth of the rest of sub-Saharan Africa if steps were not taken to address the policy uncertainties holding back growth in the two countries. In its latest ‘Regional Economic Outlook’ report launched on Tuesday in Abuja,

The International Monetary Fund (IMF) has said that Nigeria and South Africa would continue to draw back the economic growth of the rest of sub-Saharan Africa if steps were not taken to address the policy uncertainties holding back growth in the two countries.

In its latest ‘Regional Economic Outlook’ report launched on Tuesday in Abuja, the IMF said although economic recovery in most parts of sub-Saharan Africa was expected to pick up from 3 percent in 2018 to 3.5 percent, the aggregate growth rate in the two countries in 2019 was expected to be about 2.1 percent.

The report said the growth rate in the region, expected to stabilise slightly below 4 percent or reach 5 percent in 21 countries, would exclude Nigeria and South Africa, the region’s two major economies.

“Half of the region’s countries, mostly non-resource-intensive, are expected to grow at 5 percent or more, and see a faster rise in income per capita than the rest of the world on average over the medium term,” the report noted.

“However, the remaining 24 countries, comprising mostly resource-intensive countries, including Nigeria and South Africa, which are more than two-thirds of the region’s total population, are expected to fall behind”, it added.

In Nigeria, the IMF said recovering oil output would drive growth rate from about 1.9 percent in 2018 to about 2.1 percent in 2019, with near-term outlook expected to remain subdued due to lower crude oil prices.

The report identified external pressures, namely trade tensions, volatile global financial conditions, and low commodity prices, and climatic conditions affecting agricultural output and policy uncertainties as domestic drawback to economic growth.

Other external challenges weighing on growth include rising debt profile of some countries and weak public balance sheets, with reserve buffers below levels considered adequate for the countries’ economic development.

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