Nigeria Economic Update, Fall 2019 : Jumpstarting Inclusive Growth - Unlocking the Productive Potential of Nigeria’s People and Resource Endowments
Nigeria continues its recovery from the 2016 recession, sustaining an estimated 2 percent growthrate in 2019. The collapse of global oil prices during 2014–16, combined with lower domestic oil production, led to a sudden slowdown in economic activi...
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| Format: | Report |
| Language: | English |
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Washington, DC: World Bank
2019
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| Online Access: | http://documents.worldbank.org/curated/en/394091575477674137/Jumpstarting-Inclusive-Growth-Unlocking-the-Productive-Potential-of-Nigeria-s-People-and-Resource-Endowments http://hdl.handle.net/10986/32795 |
| Summary: | Nigeria continues its recovery from the
2016 recession, sustaining an estimated 2 percent growthrate
in 2019. The collapse of global oil prices during 2014–16,
combined with lower domestic oil production, led to a sudden
slowdown in economic activity. Nigeria’s annual real GDP
growth rate, which averaged 7 percent from 2000 to 2014,
fell to 2.7 percent in 2015 and to -1.6 percent in 2016.
Growth rebounded to 0.8 percent in 2017, 1.9 percent in
2018, and then plateaued at 2 percent in the first half of
2019, where it is expected to remain for the rest of the
year. Services, particularly telecoms, remained the main
driver of growth in 2019, although trade started contracting
amidst increasing use of policy measures aimed at import
substitution. Agricultural growth picked up slightly but
remains affected by insurgency in the Northeast region and
ongoing farmer-herder conflicts. Industrial performance was
mixed: growth in the oil sector remained stable, but
manufacturing production slowed in a context of weaker power
sector supply. Overall, the slow pace of recovery in 2019 is
attributable to weak consumer demand and lower public and
private investment. The annual headline inflation rate fell
from a peak of 15.7 percent in 2016 to a projected 11.6
percent in 2019 but remains high and above the central
bank’s target of 6–9 percent. The focus section of this
report analyzes the evolution of productivity in Nigeria and
identifies policies and institutions that can leverage
productivity growth to accelerate Nigeria’s economic
expansion and create new job opportunities. The analysis
highlights four key priorities. First, ensuring policy
transparency and predictability will be critical to reduce
investment risk and promote growth outside the extractive
industry. Second, investing in infrastructure, strengthening
land tenure security, improving educational outcomes, and
liberalizing the trade regime and enhancing trade and
transport facilitation would help develop value chains and
facilitate the efficient reallocation of factors of
production, making Nigeria more cost-competitive. Third,
reducing regulatory discretion would help attract foreign
and domestic investment to the nonoil sector, encourage
competition, and promote formalization.And fourth, improving
access to finance could enable new firms to compete with
incumbents and allow more productive firms to scale up their
operations. Actions in these areas would lay the groundwork
for Nigeria’s transition to a new economic model that more
effectively utilizes its large, young population and
abundant natural resources to support sustainable growth and
poverty reduction. |
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