Why World Bank Raises GDP Growth Forecast for Nigeria to 1.8%

The World Bank has increased Nigeria’s Gross Domestic Product (GDP) growth projection for 2021 to 1.8 per cent, higher than the 1.1 per cent it had estimated for the country earlier this year.

The Washington-based institution, in its June 2021 Global Economic Prospect released yesterday, also forecast the GDP growth to hit 2.1 per cent for the country in 2022, compared with the 1.8 per cent it had predicted for Nigeria in the earlier report released in January.

Nigeria recorded a GDP growth rate of 0.51 per cent (year-on-year) in the first quarter of 2021, (Q1 2021) compared with the 0.11 per cent recorded in the fourth quarter (Q4) 2020, according to figures the National Bureau of Statistics (NBS) released last month.

But the World Bank hinged its positive prediction for Nigeria on the expectation that crude oil prices would remain high as well as the government effecting structural reforms and flexible exchange rate management.

It said: “Growth in Nigeria is expected to resume at 1.8 per cent in 2021 and edge up to 2.1 per cent next year, assuming higher oil prices, structural oil sector reforms, and market-based flexible exchange rate management.”