The World Bank has predicted that Nigeria’s economy is expected to grow by 2.4 per cent in 2021 owing to support by the service sector.
This was contained in its October edition of Africa’s Pulse, an economic update for the region which the bank publishes two times a year.
Titled: “Climate Change Adaptation and Economic Transformation in Sub-Saharan Africa,” the report held that Sub-Saharan Africa (SSA) is set to emerge from the 2020 recession sparked by the COVID-19 pandemic; with growth expected to expand by 3.3 per cent in 2021.
The Bank revealed that Angola would grow by 0.4 per cent, after five consecutive years of recession.
South Africa was projected to grow by 4.6 per cent; reflecting better performance in services, industry, and somewhat agriculture.
“Excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 per cent in 2021; with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 per cent, respectively.”
According to the Bank, the 3.3 per cent expansion in the region is one per cent higher than the April forecast; a rebound that is currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures; as well as a recovery in global trade.
It said that a positive trend was that African countries had seized the opportunity of the COVID-19 crisis; using it to foster structural and macroeconomic reforms.
Several countries, it said, had embarked on difficult, but necessary structural reforms; such as the unification of exchange rates in Sudan; fuel subsidy reform in Nigeria and the opening of the telecommunications sector to the private sector in Ethiopia.
However, it said that in spite of the expansion, the region remained vulnerable; given the low rates of vaccination on the continent, protracted economic damage and a slow pace of recovery. Also, it stated that growth for 2022 and 2023 would also remain just below four per cent; continuing to lag behind the recovery in advanced economies and emerging markets and reflecting subdued investment in SSA.
“Additionally, thanks to prudent monetary and fiscal policies, the region’s fiscal deficit; at 5.4 per cent of Gross Domestic Product (GDP) in 2021; is expected to narrow to 4.5 per cent of GDP in 2022 and three per cent of GDP in 2023.
“However fiscal discipline, combined with limited fiscal space, has prevented African countries from injecting the level of resources required to launch a vigorous policy response to COVID-19.”
The publication indicates that apart from mounting fiscal pressures and rising debt levels as they implement measures for a sustainable and inclusive economic recovery; SSA countries were also faced with worsening impacts of climate change.
It advised that just as the countries have used the crisis to introduce reform measures; they should also harness the opportunity to make sustainable, resilient transitions toward low-carbon economies.