The World Bank has raised Nigeria’s growth projection from 1.1 percent previously estimated earlier in the year to 1.8 percent for 2021.
The Washington-based organisation disclosed this in its June 2021 Global Economic Prospect released on Tuesday.
The institution also predicted that growth in Africa’s largest economy will hit 2.1 percent in 2022, up from the 1.8 percent it had projected in its January report.
This is despite the economy growing by just 0.51 percent in the first quarter of 2021 and 0.11 percent in the final quarter of 2020.
The multilateral institution hinged its new growth prediction on rising crude oil prices and the expectation that it will remain so in the near term. Also, the ongoing government structural reforms and flexible exchange rates being implemented by the Central Bank of Nigeria were some of the factors highlighted for the increase in growth expectations.
The World Bank said, “Growth in Nigeria is expected to resume at 1.8 percent in 2021 and edge up to 2.1 percent next year, assuming higher oil prices, structural oil sector reforms, and market-based flexible exchange rate management.”
In Sub-Saharan Africa, the bank said growth has started rebounding after shrinking by 2.4 percent in 2020 due to the COVID-19 pandemic.
It said “The pandemic has contributed to wider budget deficits and a spike in government debt, heightening the risk of debt distress in some countries. Activity in the three largest economies—Angola, Nigeria, and South Africa— has partially recovered.
“Many industrial and agricultural commodity exporting countries experienced deep contractions last year. In tourism reliant countries, international arrivals have been at a near-halt, and tourism is likely to remain slow until wider vaccination permits safe reopening to international travel.
“Despite improvement, COVID-19 has continued to have adverse impacts on health, schooling, investment, and economic growth,” it stated.