World Bank cuts economic forecast for Nigeria, sees 4.1% contraction

The World Bank has revised its 2020 forecast for Nigeria’s economy to -4.1 percent, saying the country’s near-term outlook is subject to “considerable uncertainty”.

The latest forecast is worse than the previous projection of -3.2 percent.

The World Bank had said in June that the collapse in crude oil prices, coupled with the COVID-19 pandemic, was expected to “plunge the Nigerian economy into a severe recession, the worst since the 1980s”.

It estimated then that the economy would likely contract by 3.2 percent this year, saying the projection assumed that the spread of COVID-19 in Nigeria would be contained by the third quarter of 2020.

The World Bank, in its ‘Africa’s Pulse’ report released on Thursday, noted that after expanding 1.9 percent year-on-year in Q1 2020, real GDP in Nigeria contracted by 6.1 percent year-on-year in 2020Q2, with growth in the oil and non-oil sectors falling.

The Bretton Woods institution said, “The near-term outlook is subject to considerable uncertainty as the economy continues to grapple with the effects of the pandemic. Activity data suggest that the rebound in activity that started in Q3 2020 may have stalled.

“Investment remains weak amid high uncertainty. Growth is projected to fall by 4.1 percent in 2020 and remain subdued at 0.3 percent in 2021.”