ABUJA, Nigeria (CU)_A weak fiscal base and poor investment in Nigeria could subdue the country’s economic recovery this year, the World Bank said on Tuesday (Jan 5).
While Africa’s largest economy would grow by a mere 1.1 percent in 2021, activity in Nigeria is “anticipated to be dampened by low oil prices, OPEC quotas, falling public investment due to weak government revenues, constrained private investment due to firm failures, and subdued foreign investor confidence,” the Washington-based multilateral lender said.
Meanwhile, Africa’s most industrialised economy, South Africa, is said to have experienced a bigger hit by the pandemic, as it is estimated that the country’s output fell by 7.8 per cent last year. And in 2021, South Africa is expected to experience a weak growth momentum of 3.3 per cent, which reflects the lingering effects of the pandemic as well as the likelihood that some mitigation measures will need to remain in place.
In the report titled Global Economic Prospects, the World Bank further noted that in terms of an outlook on the Sub-Saharan African region, contraction in output in 2020, owing to pandemic-induced disruptions in economic activity, is estimated to be 3.7 per cent, while growth in the region is forecast to rebound moderately to 2.7% this year.
A noteworthy factor highlighted in the report is that this contraction of output in 2020 resulted in per capita income in the Sub-Saharan Africa shrinking by 6.1 per cent, thereby setting average living standards back by at least a decade, in a quarter of the economies in the region.
According to the World Bank, the hardest hit countries were those with large domestic outbreaks and those heavily dependent on travel and tourism, as well as commodity exporters, particularly oil exporters.
Although the Report claims that the global economy altogether is expected to expand by 4 per cent in 2021, after a 4.3 per cent contraction last year, however, it also notes that the pandemic has led to a heavy toll of deaths and illness, forced millions into poverty, and may depress economic activity and incomes for a prolonged period.
