World Bank sees growth in Nigerian GDP in 2018 below 2% :: Kenya

LAGOS – The World Bank expects the Nigerian economy to grow slightly less than 2 percent this year, driven mainly by the non-oil sectors and services, with the election approach pushing away foreign investors, the government said on Wednesday.

Nigeria emerged from a recession last year, but growth remains fragile as the government borrowed domestic and foreign loans to finance its budget. It has raised nearly 9 billion USD in the Eurobond market since 2017 to boost growth.

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"The emergence of Nigeria after the recession remains slow and sectoral growth is unstable. In the second quarter of 2018, the oil sector contracted by 4.0%, "said the bank in a statement.

GDP grew 0.83% last year, following a contraction of 1.58% in 2016, its first annual contraction in 25 years. The central bank of Nigeria is forecast for this year growth of 1.75%.

The World Bank said the growth of the agricultural sector, which had held up well in the past, slowed to 1.2% under the impact of security problems in the north.

The World Bank said non-oil industries and services, which account for more than half of Nigeria's economy, were driven by growth in construction, transportation and communications technologies.

But he said investment in human capital, which the government was trying to stimulate, remained weak compared to other countries.

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Nigeria relies heavily on its oil sector for its government revenue and foreign exchange, but it has been limited by a subsidy on gasoline and other deductions, the bank said, noting that foreign investment were stagnant.

Higher oil exports helped current account data in the first half, but non-oil revenues were lower than expected despite reforms undertaken to improve the economy.

The World Bank expects the budget deficit to widen in 2018 as portfolio investors are cautious before the elections, despite rising local yields.

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