The World Bank has raised its 2021 economic growth forecast for Nigeria to 2.4 per cent, but said this still falls behind the sub-Saharan growth forecasts of 3.3 per cent in 2021 and 3.5 per cent in 2022.
The World Bank disclosed this in the latest edition of its Africa’s Pulse Report.
The World Bank said the rebound is currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade.
However, the bank said growth still remains vulnerable given the low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery.
The Bank stated:”The analysis shows that current speeds of economic recovery in the region are varied, with the three largest economies, Angola, Nigeria, and South Africa, expected to grow by 0.4 per cent, 2.4 per cent, 4.6 percent respectively.
“Excluding South Africa and Nigeria, the rest of SSA is rebounding faster at a growth rate of 3.6 percent in 2021, with non-resource-rich countries like Côte d’Ivoire and Kenya expected to recover strongly at 6.2 and 5.0 percent, respectively.
“Sub-Saharan Africa 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.”
According to analysis in the Pulse, growth for 2022 and 2023 will also remain just below four per cent, continuing to lag the recovery in advanced economies and emerging markets, and reflecting subdued investment in SSA.
However, Chief Economist for Africa at the World Bank, Albert Zeufack, noted that faster access to Covid’19 vaccines would speed up SSA growth in 2022 and 2023.
He said “Fair and broad access to effective and safe COVID 19 vaccines is key to saving lives and strengthening Africa’s economic recovery.
“Faster vaccine deployment would accelerate the region’s growth to 5.1 per cent in 2022 and 5.4 per cent in 2023 as more containment measures are lifted, boosting consumption and investment.”
The Bank projected that the region’s fiscal deficit, at 5.4 per cent of Gross Domestic Product, in 2021, is expected to narrow to 4.5 per cent of GDP in 2022 and three per cent of GDP in 2023 as a result of prudent monetary and fiscal policies as factors.
A positive trend, according to the report, is that African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms.
It said that several countries have 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.