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The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow by -3.4 percent by the end of the year.
The economy grew by 2.2 percent in 2019.
The IMF in its Economic Outlook released on Tuesday also expects Nigeria’s consumer index (inflation) to be at 13.4 percent.
The predictions were not unexpected following the outbreak of the Covid-19 pandemic in the country which has led to imposition of lock down in several parts of the country.
Lagos, the country’s commercial capital, Ogun a major industrial hub and Abuja have all been on 14-day lock down which was extended by a further 14-day by President Muhammadu Buhari.
Also the price of crude oil, the country’s main export and revenue earner, has fallen drastically due to low demand of oil occasioned by the Coronavirus outbreak across the globe.
Nigeria’s budget for 2020 has been reduced by over 30 percent, with government facing huge shortfall in revenue.
The IMF also predicted that Sub-Saharan Africa’s gross domestic product is expected to contract 1.6 percent this year, compared 3.1 percent growth last year, as the coronavirus pandemic wrecks the region’s economies.
Various African governments have imposed lockdowns and curfews to curb the spread of the coronavirus, but the restrictions are putting pressure on most economies — some of which were already in recession.
The IMF said in its World Economic Outlook that GDP was projected to fall sharply in South Africa, the continent’s most advanced economy. The country’s GDP is projected to contract 5.8% in 2020 from growth of 0.2% in 2019.
South Africa entered a recession in the final quarter of last year as power cuts by state utility Eskom took a toll on the economy, while public finances were strained by bailouts to struggling state firms.
The country imposed some of the toughest restrictions on the continent to contain the coronavirus, including a five-week lockdown to the end of April. With production and spending curtailed, the economic outlook was set to remain grim.
The IMF and the World Bank – which has also projected a recession for sub-Saharan Africa in 2020 – are racing to provide emergency funds to African countries and others to combat the coronavirus and mitigate the impact of sweeping shutdowns aiming at curbing its spread.
(Additional report from Af.reuters)