Nigeria will experience a slow growth rate in its economy in 2018, according to a recent report by the World Bank group released on Wednesday.
According to the report, Nigeria’s Gross Domestic Product (GDP) growth is expected to stay lower than two per cent in 2018.
The report said this would be mainly driven by the non-oil industry and services with the country’s investment in human capital said to be low in comparison with other nations.
“The World Bank welcomed the Government of Nigeria’s recent ‘Call for Action’, requesting all stakeholders to join the Government’s effort to address Nigeria’s alarming human capital outcomes,” the bank said in a statement.
“As a member of the Human Capital Working Group, the World Bank stands ready to support the Government of Nigeria in its bold steps to improve the lives of its citizens.”
It added that “In the second quarter of 2018, the oil sector contracted by four per cent, the usually-resilient agricultural growth slowed significantly to 1.2 per cent, impacted by the security challenges in the Northeast and Middle Belt regions,” the World Bank said.
“The non-oil industry and services, which constitute over half of Nigeria’s economy, picked-up to 3.1 per cent and 2.1 per cent respectively, driven by growth in construction, transport, and ICT.”
The statement said, “Although oil revenues are increasing with recovering oil prices in 2018, distributions from oil revenues to the three tiers of government are constrained by the petrol subsidy and other prior deductions.
“In the first half of 2018, the current account surplus surpassed four per cent of GDP, driven largely by higher oil exports, while non-oil revenue collections have come in lower than envisaged.
“Despite sustained efforts to improve the business environment, Foreign Direct Investment inflows remain stagnated.”
It further called on Nigeria to adopt some positive reforms to tackle the challenges in the economy.
The World Bank said Nigeria should diversify the economy, reform the petrol subsidy regime, improve domestic revenue (particularly non-oil) among others.