The World Bank has revealed that the Nigerian economy has been slipping since 1995 and this negative trend continued till 2018.
The bank stated this in its latest report on the regional economy titled, ‘Africa’s Pulse’.
The World Bank in the report released the taxonomy of growth performances in 44 sub-Saharan African countries from 1995 to 2018.
It focused on the macroeconomic and financial features that led to growth resilience of the continent.
The bank further revealed that the taxonomy is used to help identify the factors that are correlated with success or failure in economic growth performance in sub-Saharan Africa, with emphasis on macroeconomic and financial variables.
The income per capita of the countries, structural transformation, capital flows, level and composition of public sector indebtedness, its currency composition and the outstanding external public debt are some of the key elements that determined the positions of each of the 44 economies.
The taxonomy compares the average annual GDP growth rates during the 1995 – 2008 and 2015 – 2018 against predetermined thresholds.
The growth performances is categorised into five groups; falling behind, slipping (which was where Nigeria falls), stuck in the middle, improved and established.
The five groups were further reclassified into three groups; top, middle and bottom.
The Nigerian economy was categorised alongside 18 others as slipping because it recorded declined economic performance between 1995 and 2018.
The Bretton Wood institution said (as seen on Punch), “If a country’s economic performance declined from 1995–2008 to 2015–18, the country is categorised in the bottom tercile, which includes ‘falling behind’ and ‘slipping.’ If a country’s growth rate remained invariant over time, between 3.5 and 5.4 per cent in both periods, it is categorised in the middle tercile (or stuck in the middle). If a country’s economic performance improved from 1995–2008 to 2015–18, with the growth of more than 5.4 per cent per year, the country is categorised in the top tercile, which includes the ‘improved’ and ‘established’ groups.”
“The bottom tercile consists of 19 countries: Angola, Burundi, Botswana, the Republic of Congo, the Comoros , Gabon, Equatorial Guinea, Liberia, Lesotho, Mauritania, Malawi, Namibia, Nigeria, Sierra Leone, Eswatini, Chad, South Africa, Zambia, and Zimbabwe. These countries did not show any progress in their economic performance from 1995–2008 to 2015–18. For instance, their median economic growth rate decelerated, from 5.4 per cent per year in 1995–2008 to 1.2 per cent per year in 2015–18,” World Bank revealed.
The 3 largest countries in the region; Nigeria, South Africa, Angola, and other commodity exporters which produce almost 60% of the region’s total GDP, were in the bottom.
Burkina Faso, Côte d’Ivoire, Ethiopia, Ghana, Guinea, Guinea-Bissau, Kenya, Mali, Rwanda, Senegal, and Tanzania are in the top tercile.
While Benin, the Central African Republic, Cameroon, the Democratic Republic of Congo, Cabo Verde, The Gambia, Madagascar, Mozambique, Mauritius, Niger, Sudan, São Tomé and Príncipe, Togo, and Uganda, are in the middle tercile.
The Bretton Wood Institution also cut Nigeria’s growth forecast by 0.1%.
“Growth in Nigeria is projected to rise from 1.9 per cent in 2018 to 2.1 per cent in 2019 (0.1 percentage point lower than last October’s forecast).
“This modest expansion reflects stagnant oil production, as regulatory uncertainty limits investment in the oil sector, while non-oil economic activity is held back by high inflation, policy distortions, and infrastructure constraints.
“Growth is projected to rise slightly to 2.2 per cent in 2020 and reach 2.4 per cent in 2021, as improving financing conditions help boost investment.
“In Nigeria, although the manufacturing and non-manufacturing PMIs remained above the neutral 50-point mark—which denotes expansion—they fell further in February, due to weaker rises in output and new sales orders across firms.
“Household consumption in Nigeria has remained subdued, while multiple exchange rates, foreign exchange restrictions, low private sector credit growth, and infrastructure constraints have continued to weigh on private investment.”
Princess Ada is a Senior Content Creator and Head of Field Reporters at Naija Buzz News. She is a graduate of The Federal Polytechnic Nasarawa, Nasarawa State, where she studied Accounting before joining the media industry. She’s well experienced in Nigeria’s online media space. Ada previously worked as the Head of Business Operations at 1Push.Ng. She is a proud Igbo from Enugu State, South-East Nigeria.