The International Monetary Fund has said it expects Nigeria’s economy to recover in 2016 even as it revised upward the growth projections for the country to 0.8 per cent based on higher oil production as well as likely improved price of crude at the international market.
The IMF in its World Economic Outlook update released yesterday said economic activities in both advanced economies and Emerging Markets and Developing Economies (EMDEs) is forecast to accelerate in 2017 and 2018, with global growth projected to be 3.4 percent and 3.6 percent, respectively, unchanged from its October forecasts.
While growth forecast for some regions were revised downward, the IMF said Nigeria’s forecasts were revised up, primarily reflecting higher oil production due to security improvements.
Nigeria, an oil dependent country is one of the hardest hit economies by the decline in the price of oil and according to the IMF; the recent market firming provides some relief for commodity dependent nations.
“The latter is particularly important in countries with pegs, where the exchange rate cannot act as a shock absorber. Over the longer term, countries highly dependent on one or a few commodity products should work to diversify their export bases.”
The Nigerian government is presently focusing on diversifying the economy away from oil and also achieving self sustenance to reduce its spending on importation. External reserve has been rising gradually as the government is tapping into all sources to get the needed funds and foreign exchange to spur the economy into growth.
With a proposed budget of N6.866 trillion, the government hopes to spur economic growth with N1.765 trillion focused on capital expenditure. The country is expected to come out of the throes of recession which it entered last year as the crash of global oil price affected the value of the naira.