Both these economies are in recession but Nigeria’s will grow faster than SA’s in 2018

The article below was written by Momentum SP Reid

The Vanguard reports that the International Monetary Fund (IMF) has
projected that Nigeria’s economy will grow at a faster pace than South
Africa’s in 2018, see table 1. According to its World Economic Outlook, WEO, for July
2017, the IMF said Nigeria will grow at 1.9% in 2018, while South Africa will
only climb by 1.2%.

In 2016, the Nigerian economy contracted by 1.6%, while South Africa
expanded by 0.3%. Projections for 2017 put South Africa’s growth at 1%,
while Nigeria is expected to muster just 0.8%. The Bretton Woods
institution, which held global growth projections at 3.5% in 2017 and 3.6%
in 2018, said growth was marked down in South Africa due to elevated
political uncertainty.

Table 1. Overview of the World Economic Outlook Projections
(Percent change unless noted otherwise)
Year over Year
Q4 over Q4 2/
EstimateProjectionsDifference from April 2017 WEO Projections 1/EstimateProjections
World Output3.
Advanced Economies2.–
United States2.–0.2–
Euro Area2.
United Kingdom2.–
Other Advanced Economies 3/
Emerging Market and Developing Economies4.
Commonwealth of Independent States–
Excluding Russia– . .. . .. . .
Emerging and Developing Asia6.
India 4/
ASEAN-5 5/
Emerging and Developing Europe4.–
Latin America and the Caribbean0.1––0.1–0.1–
Middle East, North Africa, Afghanistan, and Pakistan2.–0.1. . .. . .. . .
Saudi Arabia4.–0.3–
Sub-Saharan Africa3. . .. . .. . .
Nigeria2.7– . .. . .. . .
South Africa1.–
Low-Income Developing Countries4.–0.1–0.1. . .. . .. . .
World Growth Based on Market Exchange Rates2.
World Trade Volume (goods and services) 6/ . .. . .. . .
Advanced Economies4.–0.1. . .. . .. . .
Emerging Market and Developing Economies0. . .. . .. . .
Commodity Prices (U.S. dollars)
Oil 7/–47.2–15.721.20.1–7.70.416.26.2–0.8
Nonfuel (average based on world commodity export weights)–17.5–1.85.4–1.4–3.1–
Consumer Prices
Advanced Economies0.–0.1–
Emerging Market and Developing Economies 8/–
London Interbank Offered Rate (percent)
On U.S. Dollar Deposits (six month)–0.1–0.6. . .. . .. . .
On Euro Deposits (three month)–0.0–0.3–0.3– . .. . .. . .
On Japanese Yen Deposits (six month) . .. . .. . .
Source: IMF

“In Sub-Saharan Africa, the outlook remains challenging. Growth is
projected to rise in 2017 and 2018, but will barely return to positive territory
in per capita terms this year for the region as a whole–and would remain
negative for about a third of the countries in the region,” the IMF said.

“The slight upward revision to 2017 growth relative to the April 2017 WEO
forecast reflects a modest upgrading of growth prospects for South Africa,
which is experiencing a bumper crop due to better rainfall and an increase in
mining output prompted by a moderate rebound in commodity prices.
However, the outlook for South Africa remains difficult, with elevated political
uncertainty and weak consumer and business confidence, and the country’s
growth forecast was consequently marked down for 2018.”

The IMF also added that global growth will be aided by growth in the US and
the UK, who are projected to grow at 2.1% and 1.5%, respectively.
“China’s growth projections have also been revised up (6.7%), reflecting a
strong first quarter of 2017 and expectations of continued fiscal support.
Inflation in advanced economies remains subdued and generally below
targets; it has also been declining in several emerging economies, such as
Brazil, India, and Russia.”

The IMF mentioned the risks threatening the strength and durability of the
recovery such as election related risk, political uncertainty, failure to lift
potential growth and make growth more inclusive and rising geopolitical
tensions, among others. With the help of resilient global growth, we believe
that both Nigeria and South Africa have the potential to grow above the
forecast, assuming that appropriate policies are implemented to lessen
some of the risks mentioned above.

Related Content

Here’s what PSG plans to do with Capitec windfall

PSG will soon close the curtain on its reign as Capitec’s largest shareholder. The investment holding group last night revealed long waited plans on how it would offload its majority shareholding in Capitec. PSG CEO, Piet Mouton joins CNBC Africa for more.

COVID-19: How is Ghana protecting its small and medium scale businesses?

In the wake of the COVID-19 pandemic, Ghana has rolled out some palliatives including a 600 million cedis stimulus package for small and medium scale businesses with the aim of minimising the exposure of these businesses to the economic fallout of the pandemic. Joining CNBC Africa to discuss this initiative is Kosi Yankey-Ayeh, Executive Director of the National Board for Small and Medium Scale Industries in Ghana.

COVID-19 headwinds weigh on Nigerian oil companies

Capital imported to Nigeria’s oil and gas sector in the first quarter of the year was about 10.1 million dollars according to data by the National Burea of Statistics. The bureau also says the oil and gas sector grew by 5.06 per cent, recording an average oil daily production of 2.07 million barrels per day in the same quarter. Oyeyemi Oke, Oil and Gas Lawyer and a Partner at A02 Law joins CNBC Africa for more.

SA creates a digital COVID-19 self-diagnostic tool

The United Nations agency has launched a new COVID-19 Self-Diagnostic Application and Predictive Modelling digital tool for South Africa. The collaboration between the United nations Institute for Training and Research and other organisations in South Africa will be used by the Department of Health to ramp up testing and allow exhaustive health resources to use digital technology to help in the fight against Covid-19. Zviko Mudim, Operations Executive of the Rali and Mokentse Mampeule Foundation, one of the South African originations that helped to create this technology joins CNBC Africa for more.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

Central Bank of Nigeria cuts benchmark lending rate to 12.5%

Nigeria’s central bank cut its benchmark lending rate to 12.5% from 13.5%, the central bank governor said on Thursday.

How COVID-19 impacts access to sustainable energy in SSA

The World Bank says despite accelerated progress over the past decade, the world is expected to fall short of the SDG 7 target. In its just-released 2020 edition of the Energy Progress Report, the World Bank says under current policies, an estimated 8 per cent of the global population will not have access to electricity by 2030, and 90 per cent of them will be in sub-Saharan Africa. Makhtar Diop, the Vice President for Infrastructure at the World Bank joins CNBC Africa to discuss the findings of this report.

How Africa is hooking up the wilderness with the universe to help NASA in the space race.

Work at the Deep Earth Station is likely to see the biggest influx of people and equipment into Majtiesfontein since the Anglo-Boer War when it was home to British 12,000 troops.

Nigeria’s MPC cuts benchmark rate to 12.5%

In a surprise move, Nigeria Monetary Policy Committee cut its main policy rate by 100 basis points to 12.5 per cent and maintained other parameters constant in its third meeting of the year. Bismarck Rewane, CEO of Financial Derivatives and Muda Yusuf, Director-General of the Lagos Chamber of Commerce and Industry joined CNBC Africa’s Wole Famurewa for a post-analysis of this decision....

Partner Content


May 2020 -- Six months ago the vision for vivo in South Africa was just beginning to...

Building Africa’s Biggest Digital Classroom

An enduring lesson learnt throughout our 175-year existence is that, while things rapidly change around us, the things that truly matter don’t!...

Trending Now


May 2020 -- Six months ago the vision for vivo in South Africa was just beginning to...

Dubai gives the green light to reopen gyms, movie theaters and other non-essential businesses as lockdown lifting continues

Key Points: The Dubai government announced new measures to lift restrictions on businesses, allowing gyms, movie theaters, leisure...

India is set to report a sharp slowdown as the pandemic hits its economy — and things could get even worse

Key Points India is set to report growth numbers for the first three months of this year, and...

Zuckerberg defends Facebook from Trump’s crackdown and everything else you missed: CNBC After Hours’s MacKenzie Sigalos brings you the day’s top business news headlines, and what to watch as the coronavirus pandemic continues to keep most of America on lockdown. On today’s show, Mark Zuckerberg tells CNBC why Facebook is not an “ar
- Advertisement -