FG projects 2.2% economic growth for 2017 against IMF 0.8%

Federal Government in its 2018-2020 Medium term fiscal frame work and strategy has projected a gross domestic growth of 2.2 per cent in 2017 against IMF 0.8 per cent growth projection. The government projection is in sharp disagreement with the International Monetary Fund over how much the economy will grow this year.

The government’s forecasts, are contained in the 2018-2020 Medium Term Fiscal Framework and Strategy Paper, which forms the basis for the 2018 budget. The medium term fiscal framework projects a turn around of the economy from recession to 2.2 per cent this year, 4.8 percent in 2018 and 4.5 per cent in 2019, before reaching 7 per cent in 2020.

It will be recalled that the Nigerian economy slipped into a recession in 2016 as low crude prices and oil production slashed government revenues, caused dollar shortages and crippled its economy. According to National Bureau of Statistics the economy contracted 0.5 per cent in the first quarter of 2017, its smallest fall in five quarters of decline.

The International Monetary Fund, however, is not so optimistic, saying on Wednesday it expects Nigeria’s economy to grow by 0.8 per cent this year, with threats to growth remaining elevated. It saw significant revenue shortfalls in the first half of 2017, with interest payments remaining as high as 40 percent at end of June. Nigeria estimates record spending of N7.94 trillion next year, up 6.7 per cent from the sum budgeted for 2017 with deficit rising to 2.45 per cent as a percentage of GDP.

The government projects the Naira’s exchange rate to the dollar, which has traded at around N305 on the interbank market since 2016, to remain stable while inflation will decline but remain in double-digits at 12.42 per cent next year. The government expects oil production to hit 2.3 million barrels per day at a benchmark price of $45 per barrel. It said oil production reached 1.9 million barrels between January to June 2017 including condensates.