IMF projects economic growth for Nigeria and South Africa in 2017 and 2018
The IMF World Economic Outlook was released on January 16, 2017. [1] In the Outlook, Nigeria and South Africa have been projected to experience economic growth in 2017 and 2018. The forecast for Nigeria was revised upwards from the October 2016 projections. This was largely connected with higher oil production resulting from improved security. Nigeria is now projected to grow at 0.8% in 2017 and 2.3% in 2018. This marks a 0.2 and 0.7 percentage points increase from the October 2016 projections for 2017 and 2018. On the other hand, South Africa’s estimated growth in 2016 was 0.3%. A growth rate of 0.8 and 1.6% is projected for South Africa in 2017 and 2018 respectively.
For Nigeria the economy was in recession in 2016, with growth estimated at -1.5%. A number of factors were responsible for this. Such factors include: low commodity prices, foreign exchange shortages, militant activity in the Niger Delta, and electricity blackouts.[2]
In order to improve the business climate in Nigeria, the Senate is currently considering 11 economic bills. These bills have been projected in research findings (by the Nigerian National Assembly Business Environment Roundtable) as capable of reducing poverty by 16.4%. This would be achieved by creating 7.5 million jobs and impacting the GDP by an average of 6.87% over a 5 year period.[3] Some of the bills include: Petroleum Industry Bill (PIB); National Development Bank of Nigeria (Establishment Bill); Nigerian Ports and Harbours Authority Act (Amendment) Bill; National Road Fund (Establishment) Bill; National Transport Commission Act, 2001 (Amendment) Bill; Warehouse Receipts Act (Amendment) Bill; Companies and Allied Matters Act (CAMA) (Amendment) Bill; Investment and Securities Act (ISA); Customs and Excise Management Act; Federal Competition Bill and National Road Authority Bill.
In South Africa, economic growth was slow in 2016. This was primarily due to a decline in commodity prices, high rate of unemployment, policy uncertainty and political risks. Some of these factors are addressed in the Medium Term Budget Policy Statement (MTBPS) 2016 which seeks to achieve economic reforms by increasing revenue through tax; decreasing the expenditure ceiling; increasing investment in infrastructure mainly in energy, transport, and telecommunication; increasing investment in higher education; addressing barriers to investment across every sectors (such as enhancing the labour market institutions, managing industrial disputes better and protecting vulnerable workers); speedily resolving regulatory uncertainty and policy challenges; and improving supply chain management to ensure increased value for money and combat corruption.[4]
[1] See IMF World Economic Outlook, October 2016
[2] Id. at Page Page 5
[3] See NASS News
[4] Minister Pravin Gordhan: Medium Term Budget Policy Statement 2016, 26 October
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