IMF Scores Nigeria’s Economy Low
- By Ray Echebiri
- Published April 27th, 2009
- News
- Unrated
THE impact of the on-going global economic crisis on Nigeria’s economy will be very heavy as the economy heads for its lowest growth in a decade. In its World Economic Outlook (April 2009) released in Washington D.C, the International Monetary Fund (IMF) projected that the Nigerian economy will only grow by 2.9 per cent this year. This will mean a decline of 2.4 per cent from the 5.3 per cent growth achieved in 2008. But Nigeria’s projected growth will be higher than the average for sub-Saharan Africa, which the IMF said will be 1.5 per cent in 2009.
Worse still, the national economy is projected to decline further in 2010, growing by only 2.6 per cent. This represents a decline of 0.3 per cent from the 2009 level. The inflation rate is also projected to remain high in the year at 14.2 per cent, up from the 11.2 per cent level of 2008.
But the IMF projects that the inflation rate will moderate to 10.1 in 2010.
Analysts said the slow growth of the national economy this year and in the years ahead will mean that unemployment queue will get longer as the economy will not experience the kind of expansion that will enable the public and private sector to employ more people.
The indication, therefore, is that hard times await Nigerians unless something drastic is done by government to engender more rapid growth of the national economy.
The IMF also projects that on the external front, the national economy will perform even worse. According to the Fund, the country’s current account will be in the red this year, recording - 9.0 per cent balance, declining from the 2008 level of 4.5 per cent. But the Fund projects that the country’s current account balance will improve a little in 2010 but will still be in the red at -3.5 per cent.
The IMF advised that the priority for Nigeria and other African countries must be to contain the adverse impact of the crisis on growth and poverty. The Fund further advised that the policy through these difficult times should be guided by the following principles: maintain planned spending, ease monetary policies and let exchange rates adjust to the external environment.
Worse still, the national economy is projected to decline further in 2010, growing by only 2.6 per cent. This represents a decline of 0.3 per cent from the 2009 level. The inflation rate is also projected to remain high in the year at 14.2 per cent, up from the 11.2 per cent level of 2008.
But the IMF projects that the inflation rate will moderate to 10.1 in 2010.
Analysts said the slow growth of the national economy this year and in the years ahead will mean that unemployment queue will get longer as the economy will not experience the kind of expansion that will enable the public and private sector to employ more people.
The indication, therefore, is that hard times await Nigerians unless something drastic is done by government to engender more rapid growth of the national economy.
The IMF also projects that on the external front, the national economy will perform even worse. According to the Fund, the country’s current account will be in the red this year, recording - 9.0 per cent balance, declining from the 2008 level of 4.5 per cent. But the Fund projects that the country’s current account balance will improve a little in 2010 but will still be in the red at -3.5 per cent.
The IMF advised that the priority for Nigeria and other African countries must be to contain the adverse impact of the crisis on growth and poverty. The Fund further advised that the policy through these difficult times should be guided by the following principles: maintain planned spending, ease monetary policies and let exchange rates adjust to the external environment.
