The World Bank has forecast a 3.2 percent depression level for Nigeria for the rest of the year. The forecast was coming on the heels of a similar forecast by the International Monetary Fund (IMF), saying the economy could contract by 5.4% in 2020.
According to World Bank, the prediction was informed by its Nigeria Development Update (NDU) report reflecting the glut in oil prices and the impact of the COVID-19 pandemic on the economy.
The NDU report tagged, ‘Nigeria in Times of COVID-19: Laying Foundations for a Strong Recovery’, estimated that the economy would contract by 3.2% if the pandemic was contained by the third quarter of the year.
“If the spread of the virus becomes more severe, the economy could contract further,” the Bank said.
The bank had projected a 2.1 percent growth for the economy pre-COVID-19 era. However, with the latest prediction, Nigeria’s economy may have lost the potential to grow by 5.3 percent this year, and may worsen after third quarter if the COVID-19 pandemic rages on, and oil prices continue the free fall.
In his comment, the World Bank Country Director for Nigeria, Shubham Chaudhuri, said: “Besides immediate efforts to contain the spread of COVID-19 and stimulate the economy, it will be even more urgent to address bottlenecks that hinder the productivity of the economy and job creation.”
To mitigate the effects of the contraction, World Bank’s Lead Economist for Nigeria who also authored the latest NDU report, Marco Hernandez, said: “The unprecedented crisis requires an equally unprecedented policy response from the entire Nigerian public sector, in collaboration with the private sector, to save lives, protect livelihoods, and lay the foundations for a strong economic recovery.”