IMF sees Nigeria’s economic falling 5.4% this year

The International Monetary Fund (IMF) on Wednesday, revised its economic outlook for Sub-Saharan Africa, saying the Gross Domestic Product (GDP) in the continent is expected to shrink by 3.2 percent this year due to the impact of the COVID-19 pandemic.
The new economic projections was higher than the previously estimated contraction of 1.6 percent by the Fund early in the year.
In its World Economic Outlook update, the IMF projected that Nigeria’s economy will contract this year by 5.4 percent, higher than the earlier forecasted figure of 3.4 percent contraction.
Nigeria faces economic distress not only from the coronavirus outbreak but also from a sharp fall in crude prices.
Nigeria’s government has said it expects its economy to contract by 3.4 percent this year. However, last month Nigeria’s finance minister said the economy could shrink by as much as 8.9 percent in 2020 in a worst-case scenario.
The Fund said that the GDP in South Africa, the continent’s most advanced economy, would shrink by 8 percent in 2020, a bigger contraction than the 5.8 percent forecast in April.
South Africa’s strict nationwide lockdown, imposed in late March to curb the spread of the novel coronavirus, sharply curtailed production across key sectors such as mining and retail, further hobbling an economy already in recession.
The lockdown remains in place, but some restrictions have been eased to allow key sectors to resume operations.
Meanwhile, the cost of living in Nigeria has risen steadily. Annual inflation rose for the ninth straight month in May, to a two-year high of 12.4 percent.