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Nigeria’s economy to contract by 4.3%, not 5.1% says IMF

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 Uche Usim, Abuja

 

In what proves the rapid recovery of Nigeria’s economy, the International Monetary Fund (IMF) on Tuesday revised its 2020 gross domestic growth projections for the Nigerian economy, saying it will contract by 4.3% and not 5.4% as it earlier projected.

This translates to a 1.1 percent improvement from the 5.4 percent that was projected in June and deeper than the 3.4 percent projected in April.

The global bank made the disclosure in Washington DC at its annual meetings.

IMF Chief Economist and Director, Research Department, Gita Gopinath noted that oil-exporting countries were currently battling a twin blight of the health and economic impact of the rampaging COVID-19 pandemic and the impact of low oil prices.

“They have been hit by the health crisis and they have been hit because they are oil exporters which had a collapse and more importantly, they just don’t have the resources that advanced economies have to deal with this crisis,” Gopinath said.

“Because we don’t have a financial crisis at this point, many emerging markets are able to borrow at record levels in foreign currency this year relative to previous years.”

Gopinath added that the foreign debts being absorbed by emerging market economies will not be enough and called for continued international support.

She explained that the support could spring from concessionary financing, aid and debt relief and restructuring.

“There are going to be developing and low-income economies that would need debt relief and, in some cases, restructuring of debt to make sure they have the space to do the spending that they need,” she said.

This contraction will be the worst recession in 30 years, and the second recession in five years, following closely after a negative economic growth of 1.51% in 2016.


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