Although a modest growth of 2.1 percent had been projected for Nigeria’s economy in 2018, the International Monetary Fund (IMF) said Tuesday that Nigeria’s economy might not be so lucky despite the growth projections from various quarters.
It said improved oil production and stable prices may not be adequate to guarantee the projected growth unless there is aggressive diversification of the economy.
“Many commodity exporters will not be so lucky, despite some improvements in the outlook for commodity prices. Those countries will need to diversify their economies to boost future growth and resilience,” the global financial institution stated.
Giving his opening remarks at the unveiling of the 2018 World Economic Outlook, Maurice Obstfeld, IMF’s chief economist, said commodity exporting countries would need to diversify their economies to boost further growth.
With a 0.8 percent growth signaling an exit from its 2016 recession, Nigeria’s economy was projected to grow by 2.1 percent in 2018.
“Emerging and developing economies present a diverse picture, and among those that are not commodity exporters, some can expect longer-term growth rates comparable to pre-crisis rates,” Obstfeld said.
The report attributed Nigeria’s growth projection to improved revenue and foreign exchange availability.
Nigeria’s economy is projected to grow 2.1 percent in 2018 and 1.9 percent in 2019 (up from 0.8 percent in 2017), reflecting improved oil prices, revenue, and production and recently introduced foreign exchange measures that contribute to better foreign exchange availability.
Reduced crude oil prices had negatively impacted oil exporting economies and the Organisation of Petroleum Exporting Countries (OPEC) reached an agreement to cut back supply to the market to jolt prices.
As at 5pm on Tuesday, Brent Crude, the international benchmark of crude oil, was trading at $71.28 per barrel.