World Bank IMF and Dev Agencies | |
World Bank IMF and Dev Agencies | |
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Tuesday, January 21,
2020 / 02:15 PM / By CSL Research / Header Image By: CSL Research
Yesterday, the International Monetary Fund (IMF) released
its Global Economic Outlook where the fund announced it expects global growth
to slow in 2020 to 2.9% (World Bank - 2.5%) from an estimated 3.6% in 2019. The
fund's growth projection for Nigeria at 2.5% for 2020 and 2021 is 0.4ppts
higher than the World Bank's projection for Nigeria. We recall that World Bank
released its World Economic Outlook (WEO) on January 8 where it projected
Nigeria's economy will expand 2.1% in 2020 through to 2022. Noteworthy to
mention, Nigeria's GDP growth is still expected to trail SSA forecast which IMF
projects will grow at 3.5% and World Bank at 2.9%.
The World Bank appears to be the less optimistic compared
to the IMF about growth prospects in Nigeria as well as across the globe. In
its WEO, the World Bank posited that the country's macroeconomic framework is
characterized by multiple exchange rates, foreign exchange restrictions as well
as persistent high inflation while also noting that the growing uncertainty
over the direction of the policies of the federal government will weaken growth
further.
In our view, the policy thrust and implementation
framework of the federal government remains unclear while fiscal challenges
faced by the government would continue to constrain government spending on
infrastructure. In our view, restoring the economy to the path of sustainable
growth that will translate into improved job creation, better living standards,
reduction in unemployment/poverty rates and growth in per capita income
requires the implementation of tough and not so politically friendly structural
reforms. In addition, we think policies geared towards improving the business
environment as well as the ease of doing business will boost the productivity
of SMEs and stimulate private sector participation.
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