The International Monetary Fund (IMF) says its economic growth projections are more reliable than those put forward by the Federal Government of Nigeria. In the past few years, economic projections like the mid-year economic growth, full-year economic growth, inflation rate etc projected by the IMF and World Bank have been lower than that those presented by the Nigerian government.
It will be recalled that such discrepancies have occurred twice this year alone. The Federal Government had earlier put its own growth projection for the Nigerian economy at 3.5% in the 2018 budget while IMF projected 2.5% growth for the country.
Later in the first quarter of 2018, IMF reviewed downward its own forecast to 2.1% from the earlier 2.5% earlier projected. The Federal Government equally reduced its growth forecast down to that of the IMF 2.1%.
As if that was not enough, the Breton wood institution two weeks ago at the IMF/World Bank Group meeting in Bali, Indonesia further brought down its economic growth projection for Nigeria to 1.9%.
Why The Discrepancies
According to the IMF’s Director in charge of Africa, Mr Abebe Selassie, the figures put forward by IMF are always more current than that of Nigeria. He stated that the consistent discrepancies could be linked to the gap in updating, as both Breton Wood institutions appear to be more current than the Nigerian authorities.
“I think it is a matter of updating. We are always on the watch to update our projections following developments in the economy we watch. We are always current”.
He went further to add that although Nigeria equally updates its growth forecasts, IMF’s update may be faster than that of the Federal Government.
Although, the latest growth update by the IMF is just 0.2% lower than that of the Nigerian Government. IMF’s economic growth projection for Nigeria is put at 2.3% which is far below Federal Government’s figure of 3.01%, which was brought down from the 4.5% projected in its Economic Recovery and Growth Plan (ERGP) document.
Why Cutting Down Nigeria’s Growth
The three largest economies on the African continent (Nigeria, South Africa and Angola) are holding down the aggregate growth rate for the entire continent, according to the Deputy Director of the Research Department at IMF, Gian Maria Milesi-Ferreti, who spoke at the annual meeting of the International Monetary Fund and World Bank Group in Bali, Indonesia. He said,
”The AGGREGATE growth rate for the continent is held down by the fact that the three largest economies are not performing up to their full potential.”
He further said,
“Nigeria’s growth, 1.9% this year; 2.3% next year. South Africa, only 0.8% this year. Angola, contracting by 0.1% this year. So, the aggregate – over 3% this year, close to 4% this year – is despite the largest economies in the continent doing poorly.
“The continent could do much better once these economies are on a more solid footing, particularly South Africa and Nigeria because they are really large and affect a number of countries in their neighbourhood.”
World Bank Also Reduced Nigeria’s Growth
A few weeks ago, the World Bank also cut down its 2018 economic growth forecast for Nigeria to 2.7% from the 3.1% it earlier projected for the economy last April.
The Bretton Wood institution also cited the slow expansion in the three biggest economies for the weak pace of recovery on the sub-continent, after predicting earlier in April that Africa’s recovery would gather pace in 2018.