Nigeria economic update, Fall 2019 jumpstarting inclusive growth - unlocking the productive potential of Nigeria’s people and resource endowments
Nigeria continues its recovery from the 2016 recession, sustaining an estimated 2 percent growthrate in 2019. The collapse of global oil prices during 2014–16, combined with lower domestic oil production, led to a sudden slowdown in economic activity. Nigeria’s annual real GDP growth rate, which averaged 7 percent from 2000 to 2014, fell to 2.7 percent in 2015 and to -1.6 percent in 2016. Growth rebounded to 0.8 percent in 2017, 1.9 percent in 2018, and then plateaued at 2 percent in the first half of 2019, where it is expected to remain for the rest of the year. Services, particularly telecoms, remained the main driver of growth in 2019, although trade started contracting amidst increasing use of policy measures aimed at import substitution. Agricultural growth picked up slightly but remains affected by insurgency in the Northeast region and ongoing farmer-herder conflicts. Industrial performance was mixed: growth in the oil sector remained stable, but manufacturing production slowed in a context of weaker power sector supply. Overall, the slow pace of recovery in 2019 is attributable to weak consumer demand and lower public and private investment. The annual headline inflation rate fell from a peak of 15.7 percent in 2016 to a projected 11.6 percent in 2019 but remains high and above the central bank’s target of 6–9 percent. The focus section of this report analyzes the evolution of productivity in Nigeria and identifies policies and institutions that can leverage productivity growth to accelerate Nigeria’s economic expansion and create new job opportunities.
