IMF cuts Nigeria’s growth forecast to 2%

The International Monetary Fund (IMF) has revised its prediction for Nigeria’s GDP to grow by just 2% in 2020 - a reduction from its previous forecast of 2.5% growth. 

According to the IMF, the revision reflects the impact of lower international oil prices and a predicted rise in inflation.

Additionally, the financial institution predicted that “deteriorating terms of trade and capital outflows” would further weaken the country’s economic status. 

The news comes after global ratings agency Moody’s noted that government debt in Nigeria had risen significantly, a pattern replicated across several other West African nations. 

Speaking at the end of a visit by IMF officials to Nigeria, the Fund’s Mission Chief for Nigeria, Amine Mati, said yesterday that the country would face substantial difficulties in the coming year.

“Under current policies, the outlook is challenging. The mission's growth forecast for 2020 was revised down to two per cent to reflect the impact of lower international oil prices. Inflation is expected to pick up, while deteriorating terms of trade and capital outflows will weaken the country's external position”, he said.

However, Mr Mati praised authorities in Nigeria for realising these challenges and acting accordingly. 

“The tightening of monetary policy in January 2020 through higher cash reserve requirements to respond to looming inflationary pressures is welcome. Progress on structural reforms--particularly in Doing Business, finalising power sector reforms and strengthening governance--is commendable”. 

Photo: Yahoo