IMF projects 1.5% GDP growth for Nigeria in 2021

The International Monetary Fund (IMF) has projected a 1.5% GDP growth for Nigeria in 2021, signaling a positive outlook for the country's economy. Tilewa Adebajo, CEO of CFG Advisory, discussed the IMF projections and the state of Nigeria's economy in an interview with CNBC Africa. Adebajo highlighted the challenges and opportunities facing Nigeria amidst the ongoing COVID-19 pandemic and economic uncertainties. Here are the key points from the interview and an analysis of the current economic landscape in Nigeria. Firstly, Adebajo noted that the IMF's projections are reasonable given the current situation in Nigeria. He expressed optimism that the country could come out of recession and experience marginal growth this year. However, he emphasized the importance of implementing policies to sustain this growth and achieve the projected results by the year's end. Adebajo highlighted the negative impact of the COVID-19 pandemic and associated lockdowns on Nigeria's economy, which led to social unrest and further economic challenges. He warned against the possibility of a double-dip recession if another lockdown were to be implemented, stressing the need to focus on sustaining the current trajectory for growth. Adebajo also addressed the impact of fluctuating oil prices on Nigeria's economy, noting that despite some improvement in oil prices, the impact on reserves remains minimal. He highlighted the fiscal challenges faced by the government, including high debt servicing costs and structural deficits. Adebajo underscored the importance of addressing these issues to improve the country's fiscal position and stimulate economic growth. In terms of revenue generation, Adebajo commended the government's efforts, citing an increase in tax revenues from corporate taxes and Value Added Tax (VAT). He emphasized the need for sustainable policies to maintain this positive trend and address structural issues in the economy, such as the lack of a unified foreign exchange system. Lastly, Adebajo discussed Nigeria's vaccination drive and the challenges posed by limited vaccine supplies. He raised concerns about the insufficient number of vaccines available for Nigeria's population and called for a strategic approach to combat the virus, either through increased vaccinations or potential modified lockdowns. Looking ahead, Adebajo emphasized the importance of attracting Foreign Direct Investment (FDI) to drive economic growth in Nigeria. He highlighted the need to create an enabling environment for local industries and investors, as well as to address fiscal deficits and maintain sustainable policies to instill confidence in both local and foreign investors. Adebajo's insights shed light on the key economic issues facing Nigeria and the strategies needed to navigate the current challenges and capitalize on growth opportunities.