By DAYO ADESULU
Flooding and Insecurity Cited as Key Factors in Growth Revision
The International Monetary Fund (IMF) announced on Tuesday that it has revised Nigeria’s economic growth projection downward, attributing this change to low output levels in the agricultural and oil sectors. The announcement was made by the Fund’s Chief Economist, Mr. Pierre-Olivier Gourinchas, during the World Economic Outlook press briefing at the ongoing IMF/World Bank Annual Meetings in Washington, DC.
Reasons for the Growth Revision
Gourinchas highlighted that the volatility in Nigeria’s growth, now projected to slow to 2.9% from 3.1% in July, is primarily due to adverse conditions affecting both agriculture and oil production. He stated, “We reversed Nigeria’s growth by 2 percent down because things are volatile. The reason for the reversal is precisely because of issues in agriculture due to flooding and issues about oil production relative to security, which pushed down oil production.”
Historical Context of Nigeria’s Growth Projections
Earlier in April, the IMF had projected Nigeria’s growth to be 3.3% for 2024, but this forecast was subsequently lowered to 3.1% in July. The recent adjustment marks a continued downward trend, indicating persistent challenges in key sectors of the economy.
Comments on Fuel Subsidy Removal
In response to inquiries regarding the impact of the federal government’s decision to remove fuel subsidies, which has significantly affected ordinary Nigerians, Gourinchas refrained from providing immediate insights. He stated, “I am afraid, I have to go back and check as I don’t have the numbers ready on the impact of the removal of the fuel subsidy specifically.”
Global Economic Outlook
In its broader report on the world economic outlook, the IMF noted that global growth is expected to remain stable yet underwhelming. While there have been notable revisions in forecasts for some regions, challenges such as production disruptions, civil unrest, and extreme weather events continue to affect growth prospects in emerging markets and developing economies.
The report emphasized that the outlook for the Middle East, Central Asia, and sub-Saharan Africa has been downgraded due to these issues. Conversely, upgrades in forecasts for emerging Asia, driven by strong demand for semiconductors and investments in artificial intelligence, have provided some optimism.
Conclusion and Future Projections
The IMF anticipates that global growth should reach 3.1% over the next five years, reflecting a mediocre performance overall. As global disinflation persists, the report underscores the importance of calibrating monetary policy to address sectoral dynamics while maintaining support for the most vulnerable populations.
