An international financial institution, World Bank has indicated in its ‘Economic Update’ issued in Abuja, that Nigeria’s Gross Domestic Product (GDP) growth is expected to hover slightly below two per cent in 2018.
This, according to the World Bank, will be largely driven by non-oil industry and services.
The World Bank’s Economic Update partly reads:
“In the second quarter of 2018, the oil sector contracted by 4.0 per cent. The usually resilient agricultural growth slowed significantly to 1.2 per cent, impacted by the security challenges in the northeast and Middle Belt regions.
“The non-oil industry and services, which constitute over half of Nigeria’s economy, picked up to 3.1 per cent and 2.1 per cent, driven by growth in construction, transport and ICT.”
However, the World Bank’s Economic Updates report noted that the Nigerian economy remains dependent on the small oil sector (under 10 per cent of GDP) for the bulk of its fiscal revenues and foreign exchange earnings.
It was reported that the Executive Board of International Monetary Fund (IMF), said the country’s economy was still fragile amid the most recent slow exit from recession.
Directors of the international institution noted, that important challenges remain, as growth in the non‑oil sector has not picked up, inflation remains high and sticky; unemployment is rising, and poverty is high.
The bank emphasized the need for a growth‑friendly fiscal adjustment, which frontloads non‑oil revenue mobilisation and rationalises current expenditure to reduce the ratio of interest payments to revenue to a more sustainable level and create space for priority social and infrastructure spending.
About World Bank
The World Bank is an international financial institution that provides loans to countries of the world for capital projects. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA).
World Bank’s most recent stated goal is the reduction of poverty. As of November 2018, the largest recipients of world bank loans were India ($859 million in 2018) and China ($370 million in 2018) through loans from IBRD.