“Following a 6.1 percent year-on-year contraction in 2020 Q2, Nigeria’s economy contracted by 3.6 percent in 2020 Q3, and expanded by 0.1 percent in 2020 Q4, moving out of recession faster than expected,” the bank said in its Africa’s Pulse, a biannual analysis of the near-term macroeconomic outlook for the region published in April.
“For the year, Nigeria’s real GDP is estimated to have contracted by 1.8 percent, a stronger out turn than projected in the October 2020 forecast.”
Meanwhile, the bank said it expects Nigeria’s economy to grow by 1.4 percent in 2021 as the country continues to recover.
“Nigeria, South Africa, and Angola, the region’s three largest economies, are expected to return to growth in 2021, partly owing to higher commodity prices, but the recovery will remain sluggish,” the bank.
The bank added that Nigeria’s economic growth is expected to be slower than other countries in West Africa due to inflation, high unemployment and COVID-19.
The country’s growth will be “driven by telecommunications services, trade due to the gradual opening of borders, agriculture due to an additional influx of labor, and construction, in a context of higher oil prices and fewer mobility restrictions,” it said.
“However, consumer spending and business investment are likely to remain subdued in 2021 as double-digit inflation, high unemployment, and the slow rollout of the COVID-19 vaccine weigh on households’ real income and business confidence.
“Limited fiscal space will also constrain the recovery. Growth is projected to pick up to 2.1 percent in 2022 as rising oil output bolsters exports, and the rollout of the COVID-19 vaccine gathers pace, helping to boost private consumption and fixed investment.
“Progress on the liberalization of the exchange rate regime could boost private sector activity and support stronger economic growth.”