Puts global expansion at 4.2%
From Ayodele Aminu in Washington DC, 04.23.2010

The International Monetary Fund (IMF) has forecast a growth of 7 per cent and 7.3 per cent for Nigeria in 2010 and 2011 respectively.

IMF had projected a growth of 6 per cent and 5.6 per cent for Nigeria in 2008 and 2009 respectively for Nigeria, but the country recorded a growth of 5.3 per cent in 2008.

The Fund, which also noted that the world economy was recovering from the global crisis better than expected, projected global growth to hit 4.2 per cent and 4.3 per cent in 2010 and 2011 respectively.

In the depth of the crisis last year, world economic activity contracted by 0.6 per cent as world trade slumped and credit froze up.
In its World Economic Outlook for April 2010 at the ongoing 2010 World Bank/IMF Spring Meetings in Washington D.C., the Fund put Sub-Saharan Africa’s (SSA) growth rate at 4.7 per cent and 5.9 per cent in 2010 and 2011 respectively. It noted that the region has weathered the global crisis well, and its recovery from the slowdown in 2009 is expected to be stronger than following past global downturns.

Acknowledging that some middle income and oil exporting countries were hit hard by the collapse in export and commodity markets, it said that SSA managed to avoid a contraction in 2009, growing by 2 per cent last year.

Noting that remittances and official aid flows have also been less affected than anticipated by the recessions in advanced economies, IMF said banking sector reforms have so far proved generally resilient, while private capital inflows have resumed into the region’s more integrated economies.

Commenting on declining global demand and collapse in oil price, which dealt a big blow to SSA’s major exporters, the Fund lauded the strong performance of Nigeria’s non-oil economy, which allowed the country to avoid a substantial slowdown in her economy.

The IMF however, warned that political uncertainty in several economies, particularly in West Africa, has potential to dampen their economic growth and spill over to their neighbours.

It also noted that attracting private capital flows – and ensuring that macroeconomic policy successfully accommodates them – will continue to be a major challenge.

“More than a third of economies in sub-Saharan Africa remain on the margins of international capital markets and dependants on official external financing. For these economies, the same reforms that are needed to raise productive potential – including promoting trade and financial sector development, encouraging domestic saving and strengthening institutions - are also likely to help attract private inflows on a sustained basis.

“For the region’s more advanced economies, macro-economies policy will need to take into account the renewed inflows of foreign capital to avoid over-heating, unwarranted appreciation, and asset price booms,” the Fund said.

It said among the advanced economies, the United States is off to a better start than Europe and Japan. Among emerging and developing economies, emerging Asia is said, is leading the recovery, while many emerging European and some Commonwealth of Indepen-dent States economies are lagging behind.
The Fund had forecast China’s growth at 10 per cent in 2010, with India also at a rapid 8.8 per cent.

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