SAT 23 APRIL, 2022-theGBJournal | In the April edition of its World Economic Outlook (WEO), the IMF expects Nigeria to grow by 3.4% y/y in 2022E (2021FY: +3.4% y/y) – 70bps higher than the January forecast (+2.7% y/y). The revised growth forecast was primarily hinged on the sustained increase in crude oil prices.
The combined impact of geopolitical tension arising from the Russia-Ukraine conflict and (2) OPEC+ output underperformance relative to quota have continued to push up oil prices amidst China’s strict zero-COVID strategy.
Accordingly, the IMF expects African oil-exporting countries to grow by 3.4% y/y in 2022E (2021FY: +2.9% y/y) in line with their growth expectations for Nigeria and Angola (2022E: +3.0% y/y vs 2021FY: +0.7% y/y).
Nonetheless, the risks to the global growth outlook include possible worsening of the Russia-Ukraine conflict, sharper-than-expected deceleration in China, extension of sanctions on Russian energy exports and rise of more lethal COVID-19 variants that escape vaccines.
Although we align with the IMF on Nigeria’s growth expectations, our projection is below the IMF’s forecast given the uncertainties that characterise a pre-election year, fading impact of government stimulus and normalisation of growth outcomes as base effects wane.
Twitter-@theGBJournal|Facebook-The Government and Business Journal|email: gbj@govbusinessjournal.ng|govandbusinessj@gmail.com
