The world bank has warned that Nigeria faces fragile economic recovery this year against the confidence being touted by the Federal Government of Nigeria to its citizens.
The global financial organization however noted that the country could build on its oil-driven economic recovery anticipated for it in 2017 by strengthening its macroeconomic policy framework and implementing the structural reforms needed to diversify the economy and break out of a boom and bust cycle.
This was contained in the World Bank’s newly-released Nigeria Bi-annual Economic Update.
In 2016, Nigeria plunged into full recession for the first time in 25 years . The situation was further made worse by the sharp drop in the global oil prices which adversely affected the country’s GDP.
Although the oil sector represented only 8.4 per cent of GDP in 2016, lower foreign exchange earnings from oil exports had spillover effects on non-oil sectors (industry and services) dependent on imports of inputs and raw materials, and overall real GDP contracted by 1.5 per cent, the report noted.
While it made positive forecast for the country in 2017, largely due to recovery in the oil sector, the financial institution warned that such growth was fraught with fragility and risks.
“Given the risks associated with the oil sector, recovery is fraught with a high degree of fragility and risks; notably from future shocks to the oil price or further unrest in the Niger Delta, which is not yet fully stabilised, as well as from the incomplete implementation of new JV cash call arrangements,” it said.