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Nigeria’s economy gradually recovering – IMF

The International Monetary Fund says the Nigerian economy has started to gradually recover from the negative effects of the COVID-19 pandemic.

It said the sharp output contractions of GDP growth in the second and third quarters of 2020 GDP growth turned positive in the fourth quarter and growth reached 0.5 percent in the first quarter of this year, supported by the Agriculture and services sectors.

The mission however observed an elevated Inflation at 17.9 percent, owing to high food price and that imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued Foreign Exchange shortage.

It projects that GDP growth is expected to reach 2.5 percent in 2021 and that Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.

The Mission expressed concern over resurfacing fuel subsidies, additional spending for Covid-19 vaccines, and address security challenges which pose a risk to economy.

The mission commended the authorities’ measures to contain the transmission of Covid-19 in Nigeria, including the ongoing vaccination program under the COVAX initiative, and said it strongly supports efforts to acquire additional doses from countries with surplus stocks.

BIODUN Dare

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