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Why Nigeria and Africa’s Economy Will Slow Down

Washington DC


Punam

Punam

The World Bank has said that Sub-Saharan Africa’s growth will slow down in 2015 amid falling commodity prices.

This was disclosed in the April 2015 edition of Africa’s Pulse, a World Bank publication that provides an analysis of issues shaping Africa’s economic future.

Discussing the publication during a visit to the World Bank headquarters in Washington, on Wednesday, as part of African Journalist Security and Press Freedom Reporting Tour of the U.S. organised by the Foreign Press Centre of the U.S. Department of State, Punam Chuhan-Pole, Lead Economist for the Africa Region, said economic activity in Sub Saharan Africa is projected to expand at a slower pace in 2015 with real GDP growth averaging 4 per cent, substantially below the 4.4 percent annual average growth rate of the last two decades.

The World Bank report added that “the region’s oil exporters which accounted for nearly half of the region’s GDP in 2014 have been especially hard hit by weakening terms of trade.”

It added that “although Nigeria has a more diverse economy than other oil exporters, with the oil sector accounting for about 13 per cent of GDP, 65 per cent of government revenues are derived from oil. Not surprisingly, the sharp declines in oil prices since June 2014 has put substantial pressures on the fiscal and current account balances of oil exporters.”

Asked why the quality of life of the average Nigerian appeared not to have been positively impacted even when the economy recorded impressive growths for some years, Chuhan-Pole said, “population growth affects the outcomes of the growth and this is why per capital growth has averaged 2 per cent.”

She added that “Growth has not translated into reducing poverty, because growth is not taking place in key areas like agriculture and growth needs to be more inclusive.”

Beyond that, the World Bank official said the bank was also working “to help countries to allocate resources into areas that will improve infrastructure, diversify economy and lead to more inclusive growths.”

This is necessary in order to ensure that African countries are able to add value to their raw materials and be properly insulated from commodity price fluctuations.

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Adejuwon Soyinka

Adejuwon Soyinka was former Deputy General Editor, TELL Magazine and Editor, www.tell.ng, the online publication of TELL Communications Limited

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