With pricing crises rocking the global commodity market in the recent times, the World Bank, on Wednesday released its forecast for global growth by 0.5 percent from its January figure of 2.9percent, as the credible financial institution attributes the sluggish growth in advanced economies to stubbornly low commodity prices, weak global trade, and diminishing capital flows.
However, the cut in Nigeria’s growth rate was forecasted to be very steep, compared to the global figure. The most recent update of its Global Economic Prospects report showed that the country’s economy will now grow by a slower 0.8 percent, than the 4.6 per cent earlier estimated in January.
Though, the expected significant growth rate for the year 2017 is expected to be at 3.5 per cent, improving to 4.0 per cent in 2018.
The country’s growth forecast is expected to be slower also than the 2.5 per cent projected for sub-Saharan Africa, as it would further rise to 3.9 and 4.4 per cent in 2017 and 2018.
In any case, South Africa is however expected to record a poorer growth performance than the Nigeria economy as it is projected to grow by a meagre 0.6 per cent this year, before rising 1.1, and to 2.0 per cent in 2017 and in 2018 respectively.
Moreover, the report revealed that Angola, which is also a major oil producing nation like Nigeria is to attain a growth rate of 0.9 per cent in 2017, which would rise to 3.1 per cent in 2017 before experiencing an increase growth rate of 3.4 per cent by 2018.
The World Bank explains that the commodity-exporting emerging market and developing economies staggered to adapt lower prices for oil and other key commodities, and it accounted for half of the negative growth experienced.
However, the growth recorded across these various economies is forecasted to advance at 0.4 percent pace in 2016, a drop to 1.2 per cent points from the January outlook.
On Sub-Saharan Africa, the World Bank reports that at a time when commodity prices are expected to remain low, global activity is anticipated to be weak, as financial conditions would be tightening.
The economies that solely depend on oil export are not likely to experience any significant pickup in consumption growth, while lower inflation in oil importers is expected to induce or support consumer spending.
Moreover, consumer price inflation is induced by drought, high unemployment, and the effect of currency depreciation could deplete some of the expected advantages. Also, investment growth would be drastically slow in many countries as governments and investors cut or delay capital expenditures in a context of fiscal consolidation.