Nigeria’s short-to-medium term growth outlook is constrained by a weak macroeconomic framework, policy uncertainty, and slow progress in the implementation of the already articulated structural reforms.
According to the latest World Bank’s biannual report, Nigeria’s economic growth in 2019 is expected to hover around 2 percent in the medium term, below its potential and population growth rate.
The World Bank stated in its report that the Nigeria private sector has been hampered by inadequate monetary and fiscal policies. Also, low growth potential has also been attributed to structural constraints. Inadequate monetary and fiscal policies severely limit medium-term growth outlook.
The World Bank equally noted that the delayed approval of the Medium Term Expenditure Framework 2019-2021 (MTEF/FSP) and 2019 budget, contribute to policy uncertainty, thereby postponing investment decisions across the sectors of the economy and foregoing potential growth-spurting injections.
Nigeria’s economic grew by 0.8% in 2017, below population growth rate estimated at 2.6%, and below the recession growth levels of 6%. The country’s recovery is also slower than in similar countries, mainly commodity exporters with large populations.
The World Bank reported that the level of domestic credit in Nigeria is low and behind those of peer countries. The domestic supply of private sector credit growth is limited by the attractiveness of the high rates of the government (and CBN) securities.
It is instructive to note the Federal Government’s Economic Recovery and Growth Plan (ERGP) articulates the goal to drive economic growth, diversification, and job-creation with a special focus on the real sectors of agriculture, manufacturing (including MSME-led manufacturing), and energy; as well as key services.