AFRICANGLOBE – Africa’s largest economy, Nigeria, which has maintained growth at an average of 6 to 7 percent in recent years, may see significantly less growth in 2015, with World Bank’s outlook predicting a 4.6 percent growth rate. This according to the World Bank, is expected to resonate across the bulk of Africa.
Growth in Nigeria and other countries in Africa according to the international lender will remain flat at 4.6 percent as a result of a slowdown in several of the region’s large economies, notably South Africa. The drop in growth is down-sided by the risks from the Ebola epidemic, insurgencies, global financial uncertainties and softer commodity prices, for which oil takes the lead. This was captured in the latest Global Economic Prospects (GEP) report released two days ago.
The continent’s growth could move up to 5.1 percent by 2017 if adequate attention is paid to infrastructure investment, agricultural production and services.
“Policy priorities include a need for budget restraint for some countries in the region and a shift of spending to increasingly productive ends, as infrastructure constraints are acute. Project selection and management could be improved with greater transparency and accountability in the use of public resources,” the report read.
On the global front, developing countries are expected to see a marginal increase in growth this year due to soft oil prices, a stronger US economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets. The global economy, therefore, is projected to expand by three percent this year, 3.3 percent in 2016 and 3.2 percent in 2017. Developing countries grew by 4.4 percent in 2014 and are expected to uptick to 4.8 percent in 2015, and move beyond that point to 5.3 and 5.4 percent in 2016 and 2017 respectively.
“In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people. It’s also critical for countries to remove any unnecessary roadblocks for private sector investment. The private sector is by far the greatest source of jobs and that can lift hundreds of millions of people out of poverty,” said President Jim Kim of the World Bank Group while commenting on these projections.
The Russian federation has suffered a massive blow from these events and its economy is projected to contract by 2.9 percent in 2015. However, with the right things done, it could bounce into a slight growth regime of 0.1 percent in 2016.
Kaushik Basu, Chief Economist and Vice President of the World Bank also expressed some thoughts on the development.
“Worryingly, the stalled recovery in some high-income economies and even some middle-income countries may be a symptom of deeper structural malaise. As population growth has slowed in many countries, the pool of younger workers is smaller, putting strains on productivity. But there are some silver linings behind the clouds. The lower oil price, which is expected to persist through 2015, is lowering inflation worldwide and is likely to delay interest rate hikes in rich countries,” he said.
By Emmanuel Iruobe