The World Bank spoke on Tuesday on Nigeria’s economic future, saying President-elect Muhammadu Buhari’s plan to tackle corruption will have consequences.
The bank projected a drop in the economic growth rate of Sub-Saharan Africa from 4.5 per cent in 2014 to 4.0 per cent in 2015.
The bank’s Chief Economist for Africa, Mr Francisco Ferreira, spoke during a video conference to inaugurate ‘Africa Pulse’, a World Bank Group analysis on issues shaping Africa’s economic prospects. The conference was monitored in Abuja
“I think it is very well spelt because institutions are built in parts on norms; one norm that has to be changed is the norm of impunity.
“I think the decision, hopefully, will have consequences for the future as institutions will be stronger and norms will be cleaner,” Ferreira said.
According to him, the downturn largely reflects the fall in the prices of oil and other commodities.
“The 2015 forecast is below the 4.4 per cent average annual growth rate of the past two decades and well short of Africa’s peak growth rates of 6.4 per cent in 2002 to 2008.
“Excluding South Africa, the average growth forecast for the rest of Sub-Saharan Africa is around 4.7 per cent”, Ferreira said.
Ferreira said an average decline, in terms of trade for Africa is about 18 per cent, a development he said, would lead to losses in purchasing power for the region.
He said that the decline in oil and commodity prices were among the challenges undermining the developmental gains made in the Sub-Saharan African.
“There is the issue of insurgency, fatalities as a result of conflicts, violence from political groups like the Boko Haram in Nigeria and Al-Shabaab in Kenya.
“The Ebola outbreak in Guinea, Liberia, and Sierra Leone has highlighted pre-existing weaknesses in the health systems of the three most affected countries, as well as others.
“A World Bank study estimated that the three countries will face at least $1.6 billion in forgone economic growth in 2015,” he said.
Also speaking, Ms Punam Chuhan-Pole, the bank’s Lead Economist said: “Large fiscal deficits and inefficient government spending remain sources of vulnerability for many countries of the region.
“It is urgent that these countries strengthen their fiscal positions and fortify their resilience against external shocks.”
She said beyond macroeconomic policies, there was the need for structural reforms to ignite and sustain productivity growth in all sectors in the region.
Chuhan-Pole, also said the region should focus on policies that would promote growth, adding that the poor should be considered when implementing structural reforms.