FG cuts economic growth projection to 2.6%

The reality of Nigeria’s economic woes may have become more glaring, as the Federal Government has massively cut back on the projected growth rate of the nation’s economy from %5.5 to %2.6 from 2015.

This was disclosed yesterday by the Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, in the report of the September 2015 Monetary Policy Committee, MPC..

According to the CBN, the growth rate measured by Gross Domestic Products, GDP, is now 2.6 per cent, down from 5.5 per cent.This, by implications, the FG economic growth projection is lower that what is being projected by the International Monetary Fund, IMF, and other international and local financial institutions. The IMF projected a growth rate of %4.8 while the African Development Bank, AfDB, projected %5.0

In a personal comment on the MPC report, Emefiele said: ‘’Growth prospects for 2015 weakened following the slowing growth observed in the first two quarters of the year. Output growth decelerated from 3.9 percent in 2015 Q1 to 2.4 percent in 2015 Q2 which was considerably less than the 6.5 percent and 6.2 percent recorded in 2014 Q2 and 2014 Q4, respectively.
‘’Consequently, the annualized growth projection for 2015 has been marked down from 5.5 percent to 2.6 percent’’.

The CBN governor further explained that the fragile performance of the economy in the second quarter of 2015 was as a result of the sustained turmoil in the oil sector caused by tumbling crude oil prices which led to a 0.7 percent decline in oil related GDP, noting however that ‘’the sub-par performance of the economy in the second quarter is not unique to Nigeria, but continue to reflect the imbalances and vulnerabilities inherent in commodity exporting economies’’.

According to Emefiele, the current situation calls for immediate need for fiscal consolidation and an accelerated diversification of the economy, expressing the hope that the easing infrastructural challenges illustrated by the increased availability of petroleum products (especially premium motor spirit), improved power supply and the gradual dismantling of insurgents in the North east region can prop the faltering prospects in the short-term.

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