The January 2016 Global Economic Prospects released by the World Bank has forecast that Nigeria’s economic growth index would hit 4.6 per cent in 2016, noting that weak growth among major emerging markets will have an effect on global growth in the current year.
The report revealed that Nigeria is projected to expand to 4.6 per cent after growing by 3.3 per cent last year while South Africa is expected to advance only modestly to 1.4 per cent growth from 1.3 per cent in the year just ended. However, the Sub-Saharan African region is forecast to accelerate to 4.2 per cent in 2016 from 3.4 per cent in 2015 as commodity prices stabilize.
While pointing out that economies would pick up in other oil exporting countries, on the assumption that oil prices will stabilize, the World Bank release noted that economic activity should still pick up modestly to a 2.9 per cent pace, from 2.4 per cent growth in 2015, as advanced economies gain speed.
The January prospects has it that economic activity will vary across Sub-Saharan Africa, with consumption growth remaining weak in oil exporting countries as fuel costs rise, while lower inflation in oil importing countries helps boost consumer spending.
This was as it described simultaneous weakness in most major emerging markets as a concern for achieving the goals of poverty reduction and shared prosperity because those countries have been powerful contributors to global growth for the past decade.
The report however warned that “spillovers from major emerging markets will constrain growth in developing countries and pose a threat to hard-won gains in raising people out of poverty.”
It quoted the World Bank Group President, Jim Yong Kim, as saying: “More than 40 per cent of the world’s poor live in the developing countries where growth slowed in 2015. Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable. The benefits from reforms to governance and business conditions are potentially large and could help offset the effects of slow growth in larger economies.”
For the Group Vice President and Chief Economist of the World Bank, Kaushik Basu: “There is greater divergence in performance among emerging economies. Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy.
“A combination of fiscal and central bank policies can be helpful in mitigating these risks and supporting growth,” Basu stated.