Nigeria: IMF Upgrades Nigeria's Economic Growth Forecast to 2.7 Percent

22 October 2021

The International Monetary Fund, IMF, has upgraded its forecast for Nigeria's economic growth in 2022 and 2021 to 2.7 per cent and 2.6 per cent respectively, citing recovery in non oil sectors and rising price of crude oil.

The IMF had earlier in April projected that Nigeria's economy will grow by 2.3 per cent and 2.5 per cent in 2022 and 2021 respectively.

The latest forecast was contained in the IMF's "Regional Economic Outlook for October 2021" released yesterday at the sidelines of the ongoing Annual Meetings of the IMF and World Bank in Washington.

However, the 2.7 percent growth projected by IMF for Nigeria in 2022 represents 1.5 percentage points below the 4.2 per cent growth projected for 2022 by the Federal Government in its Draft 2022 to 2024 Medium Term Fiscal Framework and Fiscal Strategy Paper (MTFF/FSP).

"In 2022, we are expecting an uptake to 4.2 per cent, then a dip to 2.3 per cent in 2023 and up to 3.3 per cent in 2024," said Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed at the public consultation on the Draft 2022 to 2024 MTFF/FSP.

The IMF also projected that the Sub-Saharan economy will grow by 3.8 per in 2022 and by 3.7 per cent this year.

The IMF said: "Nigeria's economy will grow by 2.6 percent in 2021, driven by recovery in non-oil sectors and higher oil prices, even though oil production is expected to remain below pre-COVID-19 levels.

"Growth will inch up slightly to 2.7 percent in 2022 and remain at this level over the medium term, allowing GDP per capita to stabilize at current levels, notwithstanding long-standing structural problems and elevated uncertainties."

In its projection for the Sub-Saharan African, the IMF said: "Sub-Saharan Africa is set to grow by 3.7 percent in 2021 and 3.8 percent in 2022. This rebound is most welcome and largely results from a sharp improvement in global trade and commodity prices. Favorable harvests have also helped lift agricultural production.

"But the recovery is expected to be slower than in advanced economies, leading to a widening rift in incomes. This divergence is expected to persist through the medium term - partly reflecting different access to vaccines, but also stark differences in the availability of policy support.

"The outlook remains extremely uncertain, and risks are tilted to the downside. In particular, the recovery depends on the path of the global pandemic and the regional vaccination effort, and is also vulnerable to disruptions in global activity and financial markets."

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