IMF slashes Nigeria’s growth forecast to 2%

Bloomberg

Plunging oil prices stemming from the coronavirus outbreak led the International Monetary Fund (IMF) to cut its estimate for Nigerian economic growth, highlighting the difficulties Africa’s top crude producer faces reviving and diversifying its economy.
The forecast was lowered to 2% from 2.5%, the lender said after concluding an Article IV consultation. Nigeria needs a major policy overhaul to reduce vulnerabilities including widening current-account and budget deficits that jeopardise the economy, it said.
“Under current policies, the outlook is challenging,” IMF said. “The mission’s growth forecast for 2020 was revised down to 2% to reflect the impact of lower international oil prices.”
The spread of the coronavirus has curbed demand in China, driving oil prices down nearly 13% this year, and below the $57-a-barrel the Nigerian government forecast in its 2020 budget. Nigeria, which depends on crude for 90% of its exports, has struggled to rebound from a plunge in prices that dragged its economy into its first annual contraction in 25 years in 2016.
To stoke the economy, which together with South Africa
account for almost half of sub-Saharan Africa’s gross domestic product, President Muhammadu Buhari has forced private banks to hand out more loans.