Menu

The International Monetary Fund (IMF) has revised downward its estimate for Nigeria’s gross domestic product (GDP) growth for 2020. According to its World Economic Outlook (WEO) Update, released on Wednesday, the IMF said Nigeria's economy will contract this year by –5.4 per cent, 2 percentage points below the April 2020 forecast of –3.4 per cent.    

The latest growth projection represents a 7.6 percentage point decline from the 2019 GDP growth rate of 2.2 per cent. It will also be Nigeria's worst GDP performance since 1983 when the economy contracted by –10.9 per cent, according to World Bank data.

The IMF said, "the COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast." The updated WEO shows that Nigeria's GDP will recover next year and grow by 2.6 per cent.

Global growth is projected at –4.9 per cent in 2020, compared to the –3 per cent GDP contraction forecast two months ago. The growth forecast for sub-Saharan Africa in 2020 was also revised downward by 1.6 percentage point to –3.2 per cent. South Africa, the second largest economy on the continent, is estimated to grow by –8.0 per cent this year, owing to the severe economic impact of COVID-19.

The IMF said the disruptions due to the pandemic, coupled with the significant drop in revenue for oil exporters owing to the fall in commodity prices, will also result in deep recessions in Russia (–6.6 per cent) and Saudi Arabia (–6.8 per cent).

According to the new report, titled "A Crisis Like No Other, An Uncertain Recovery," the IMF said strong multilateral cooperation remains essential on multiple fronts. It said all countries must ensure that their health care systems are adequately resourced. The Washington DC-based multilateral financial institution said global growth is projected to rebound at 5.4 per cent in 2021.