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Economic Forecast of Nigeria in 2018

According to the report, “January 2018 Global Economic Prospect”, published by the World Bank, economic forecast of Nigeria for the year is substantially more positive than that of 2017.

Nigeria is expected to grow by at least two and a half percent compared to the one percent growth recorded by the end of last year. The same report illustrates that the gross domestic product of Nigeria is poised to grow by around three percent over the next two years. Global economic growth for 2018 is poised at around three percent.

The World Bank launched the report on January 9, 2018, in Washington D.C. and it has remained largely positive about growth across the Sub-Saharan African nations. All of Sub-Saharan Africa is poised to grow through the year, at a rate of around three percent which may increase to three and a half percent through the next year.

This growth will be predominantly supported by the stabilizing of prices of commodities. Domestic demand is expected to solidify and will increase notably to have an impact on the gross domestic product.

The re-surging growth in Nigeria is yet to scale to the peak recorded before the crisis. It is actually below the averages leading up to the crisis. There is still some serious shortcoming in policies and private investment has not received the boost it needed to spur things up.

Still tough times ahead for Nigeria

Economic activity is on the rise but not nearly enough to script a turnaround story just yet.

This is not unique to Nigeria as larger economies are also finding it difficult to provide a fillip to private investment. The Nigerian government needs to improve the business sentiment and more importantly the business environment.

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There has to be initiatives that will support new investments, even if there is to be a modest rise in that in the next few months. Short term whopping rises in private investment are not likely.

Should Nigeria be able to stabilize its policies and come up with structural reforms, the major hurdles will be easier to deal with. Policy uncertainty remains a concern for most institutional investors and also the ultra rich that would look at large infrastructure projects and exploration of natural resources.

Production of oil is expected to recover significantly and that will fuel the growth in other sectors to an extent. The right policies can provide the additional boost needed for most industries unrelated to oil.

In contrast to Nigeria, South Africa is expected to record a growth of around one percent. This will be a substantial twenty five percent year on year growth but not nearly enough as the government down there would like to see.

Angola is poised to grow at just over one and a half percent. The success of the political transition in Angola has raised hopes of reforms and experts are expecting a huge improvement in the ease of doing business.

Côte d’Ivoire is expected to grow by over seven percent, Senegal is likely to grow at just under seven percent and Ethiopia will clock more than eight percent of growth.

Tanzania may clock up to seven percent while Kenya will find five and a half percent growth as most of these countries are encountering a degree of stability and correction in its recent inflation.

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