Nigeria To See Faster Economic Growth Than S/Africa In 2018 – IMF

The International Monetary Fund (IMF) has projected that Nigeria will see faster economic growth than South Africa in the 2018 fiscal year.

According to its World Economic Outlook (WEO) for July 2017, the IMF said Nigeria will grow at 1.9 percent in 2018, with South Africa’s economy is expected to increase by 1.2 percent.

Nigeria’s economy dropped into recession in 2016, with the economy contracting by 1.6 percent. The IMF predicted that the country’s economy will expand by 0.8 percent in 2017.

South Africa’s economy fell into recession last month. A 0.7 percent decline in GDP in the first quarter of this year followed a 0.3 percent contraction in the last quarter of 2016, meeting the definition of a recession as two or more quarters of negative growth.

According to the report, growth in South Africa will slow due to “political uncertainty and weak consumer and business confidence”.

The country’s economy was already struggling with official unemployment of 27.7 percent, as well as financial fallout from scandals surrounding President Jacob Zuma.

“In Sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capita terms this year for the region as a whole—and would remain negative for about a third of the countries in the region,” the IMF said via WEO.

“The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa, which is experiencing a bumper crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices.

“However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018.”

Fitch and Standard & Poor’s lowered South Africa’s credit rating to below investment grade after Zuma fired Pravin Gordhan, a finance minister seen by many South Africans as a bulwark against alleged corruption at top levels of government.

Calls for Zuma to resign have increased within the ruling African National Congress party, fueling uncertainty about the country’s leadership.

Meanwhile, the IMF noted that growth in China, US and UK will aid global economic growth.

“China’s growth projections have also been revised up (6.7%), reflecting a strong first quarter of 2017 and expectations of continued fiscal support.

“Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India, and Russia.”