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Nigeria Gross Domestic Product (GDP) growth rate to hover around 7% – IMF

By on October 10, 2012

IMF Chief Christine Lagarde

Nigeria could achieve an overall Gross Domestic Product (GDP) growth rate of 7% in 2012, this declaration was made yesterday by the International Monetary Fund (IMF). Adding that, it was possible if Nigeria springs back in its oil production.

 

IMF released this information at the on-going World Bank/IMF Annual Meeting in Tokyo, Japan in its October 2012 World Economic Outlook, “In Nigeria, non-oil GDP growth will moderate with the softer external environment and tighter macroeconomic policies. But a slight rebound in oil output will keep overall GDP growth at 7 per cent.”

 

The Central Bank of Nigeria forecasted that Nigeria’s Gross Domestic Product (GDP) will grow by 7% this year, this declaration was backed by Sanusi Lamido Sanusi with the premise that Nigeria has the right policy makers, making the right decisions to move the country forward. The IMF however, yesterday made the same projection to complement CBN’s projections.

 

Earlier this year Sanusi stated that, “the real risk in Nigeria is that of policy, adding that we have achieved an average of seven per cent growth for the last decade, and this is without steady electricity supply or adequate infrastructure.”

 

“GDP can easily move into double-digits if we implement all the things planned. There will be a major step change in growth rates in the next two to three years,” he said.

 

Nigeria recorded 6.17 per cent in the first quarter of this year, the economy then grew to 6.28 per cent in the second quarter. Within 7 years, from 2005-2012 Nigeria’s GDP growth rate averaged 6.8 per cent. The highest ever recorded is 8.6 % in December 2010 and in March 2009, the lowest was recorded, a 4.5 %.

 

“Coping with high debt and sluggish growth,” the IMF said growth in the oil-exporting countries is anticipated to stay high, near six per cent in 2012, adding that augmented oil production in Angola will increase its GDP this year probably by 6%.

 

“In the baseline scenario, under which strains in the euro area remain contained and the global economy expands by 3¼ to 3½ per cent this year and next, growth in Sub-Sahara Africa, will continue above five per cent during 2012–13,” the Fund said.

 

The IMF counselled policy makers in the region to use the opportunity provided by strong growth to restructure budgetary space and regularize monetary circumstances to be better equipped for perilous risks.

 

“Economic activity in sub-Saharan Africa (SSA) has expanded by more than 5 per cent in each of the past three years -continuing a decade-long run of strong performance that was only briefly interrupted by the global downturn in 2009.”

 

Some countries are taking part in this solid growth, with the distinguished omission of South Africa, which has been weighed down by its strong linkages with Europe, as well as some countries in western Africa hampered by drought as well as civil conflict.

 

“More recently, some food importers in the region have also been hit by the sharp increase in global food prices for a few major crops -leading to higher headline inflation and widening trade imbalances – although so far with less severe effects than during the 2007 -08 food price shocks. The region’s recent growth has occurred against a backdrop of difficult external conditions, including the escalation of the euro area crisis.”

 

“But apart from South Africa, financial spill over from Europe to the region have been modest. Export diversification has reduced exposure to weak demand from advanced economies, and high commodity prices have supported the region’s commodity exporters and boosted investment in resource extraction.”