Nigeria, Africa’s GDP growth ‘to hit 6-year low’

The growth in gross domestic product (GDP) in Nigeria and the rest of sub-Sahara Africa is set to drop to a six-year low in 2015, World Bank projections have revealed.

The projections have revealed that the region is maintaining growth, albeit at a slower pace, due to a more challenging economic environment.

Growth will slow in 2015 to 3.7% from 4.6% in 2014, reaching the lowest growth rate since 2009, the bank said.

Punam Chuhan-Pole, acting chief economist of World Bank Africa and the author of Africa’s Pulse, a bi-annual analysis of economic trends and the latest data on the continent, urged African leaders to prioritize report.

“The dramatic, ongoing drop in commodity prices has put pressure on rising fiscal deficits, adding to the challenge in countries with depleted policy buffers,” he said, ahead of the meeting of World Bank governors in Lima, Peru.

“To withstand new shocks, governments in the region should improve the efficiency of public expenditures, such as prioritizing key investments, and strengthen tax administration to create fiscal space in their budgets.”

Makhtar Diop, World Bank vice president for Africa said Africa needs right policies to diversify growth.

“The end of the commodity super-cycle poses an opportunity for African countries to reinvigorate their reform efforts and thereby transform their economies and diversify sources of growth,” he said.

“Implementing the right policies to boost agricultural productivity, and reduce electricity costs while expanding access, will improve competitiveness and support the growth of light manufacturing.”

According to the report, the 2015 forecast remains below the robust 6.5% growth in GDP which the region sustained in 2003-2008, and drags below the 4.5% growth in 2009-2014 despite global financial crisis at the time.

Despite the fall in the region, countries like Cote d’Ivoire, Ethiopia, Mozambique, Rwanda and Tanzania are expected to sustain growth at around 7 % or more per year in 2015-17.

Overall, growth in the region is projected to pick up to 4.4% in 2016, and further strengthen to 4.8% in 2017.

The slow growth rate is said to be driven by sharp drops in the price of oil, inadequate electricity, China’s economic slowdown and tightening global financial conditions.

On the bright side, poverty in Africa declined from 56% in 1990 to 43% in 2012, and a projected 35% by the end of 2015.

In the same vein, Africa’s population progressed in all dimensions of well-being, particularly in health (maternal mortality, under-5 mortality) and primary school enrollment, where the gender gap shrank.

Sub-Saharan Africa’s rich natural resources have made it a net exporter of fuel, minerals and metals, and agricultural commodities.