The World Bank expects Nigeria to improve the most in 2018 compared to peers- Kenya and South Africa- as the benign outlook for oil prices spur positive sentiments towards Africa’s largest economy.
The Washington based lender projected Growth in Nigeria to pick up by 1.5 percentage points from 1 percent in 2017 to 2.5 percent in 2018 and is further expected to grow 2.8 percent in 2019-2020, as gathered from the World bank’s 2018 global economic outlook.
Like other commodity-dependent countries, Africa’s largest oil producer has had to weather the storm of declining petrodollars, following a lengthy collapse in oil prices which started mid-2014 and production disruptions inflicted by disgruntled militants who damaged oil pipelines in a clamour for better compensation for the oil extracted from their region.
The recovery gained momentum in the third quarter 2017, after the economy grew for the first time in over a year in the second quarter. Activity was spurred by a stronger energy sector thanks to higher oil prices and a return to normal production levels following the completion of maintenance work earlier in the year.
In comparism to its peers, the World Bank projected the economy of South Africa to grow by 0.3 percentage points from 0.8percent in 2017 to 1.1percent in 2018 and the economy is further expected to increase 1.7 percent in 2019 and 2020.
South Africa recorded a solid growth in Q3 of 2017, showing that the economy was gaining traction after exiting a technical recession in Q2, of which the S&P Global Ratings also downgraded its credit rating in November 2017 over concerns of the health of public finances and reform outlook. Moody’s also placed its credit rating on review for a downgrade.
The most developed economy in Africa is expected to recover as prices for commodities pick up.Economic growth may remain constrained, however, as abysmal business confidence; political uncertainty and high unemployment weigh on fixed investment and private consumption.
East Africa’s largest economy, Kenya, is projected to be up by 0.6 percentage points from 4.9percent in 2017 to 5.5percent in 2018 as stated by the World Bank. It is further forecasted to increase to 5.9 percent in 2019 and 2020.
Kenya’s economy slowdown for most of 2017 as a result of drought, political uncertainty and sluggish credit growth, which was partly because of a cap on commercial bank lending rates imposed last September.
Kenya’s economy should is expected to rebound in 2018 after drought and political turmoil during a prolonged election cycle cut nearly 1 percent from this year’s early economic growth forecast.