BY: SAYO AKINTOLA
The World Bank has declared that despite weaker than expected global growth and stable or declining commodity prices, African economies, including Nigeria’s, have continued to expand at a moderately rapid pace, with regional gross domestic product (GDP) projected to strengthen to 5.2 per cent yearly between 2015 and 2016 from 4.6 per cent in 2014.
According to the bank’s ‘New Africa’s Pulse’-a twice yearly analysis of the issues shaping Africa’s economic prospects – significant investment in infrastructure, increased agricultural production and expanding services in African retail , telecoms, transportation, and finance, are expected to continue to boost growth in the region.
This economic reading also agrees with the verdict of the International Monetary Fund (IMF) which declared that despit pite the grave security challenges in Nigeria, the economy of the nation remains resilient. The IMF gave this verdict in its latest World Economic Outlook (WEO) as at October 2014 titled: “Legacies, Clouds, Uncertainties,” released Tuesday.
The IMF also stated that recent revisions to national accounts data by Nigeria shows that the economy is more diversified than previously thought.
The IMF also acknowledged the accretion of Nigeria’s external reserves.
The pick-up in growth, the World Bank said, is expected to occur in a context of lower commodity prices and lower foreign direct investment as a result of subdued global economic conditions.
“Overall, Africa is forecast to remain one of the world’s three fastest growing regions and to maintain its impressive 20 years of continuous expansion,” said the World Bank’s Chief Economist for Africa, Francisco Ferreira.
He noted that downside risks that require enhanced preparedness include fiscal deficits in a number of countries; economic fallouts from the activities of terrorist groups such as Boko Haram and Al Shabaab, and most urgently, the onslaught of the Ebola epidemic in West Africa.
A world Bank study of the likely economic impact of Ebola, released last month, suggested that if the virus continues to spread in the three worst affected countries-Sierra Leone, Liberia, and Guinea, its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile nations.
Meanwhile, the bank has stated that remittances by international migrants from developing countries are on course for strong growth this year, while at the same time forced migration due to violence and conflict has reached unprecedented levels.
In its issue of Migration and Development Brief, the World Bank said officially recorded remittances to developing countries are expected to reach $435 billion this year, an increase of 5 per cent over 2013.
Remittances to developing countries will continue climbing in the medium term, reaching an estimated $454 billion in 2015. Global remittances, including those to high-income countries, are estimated at $582 billion this year, rising to $608 billion next year. .
“Remittances to developing countries grew this year by 5 percent. Remittance inflows provided stable cover for substantial parts of the
import bill for such countries as Egypt, Pakistan, Haiti, Honduras, and Nepal. India and China lead the chart with projected remittance inflows of, respectively, $71 and $64 billion in 2014”, the report said.
The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 percent of the value sent, compared to 8.9 percent a year earlier. However, the cost of sending money to Africa remains stubbornly high, exceeding 11 percent.
Remittance flows are expected to grow robustly to almost all regions of the developing world, except Europe and Central Asia, where the conflict in Ukraine and associated sanctions are contributing to an economic slowdown in Russia, home to a large number of migrants from the region.
India, with the world’s largest emigrant stock of 14 million people, will remain in the top spot this year, attracting about $71 billion in remittances. Other large recipients are China ($64 billion), the Philippines ($28 billion), Mexico ($24 billion), Nigeria ($21 billion), Egypt ($18 billion), Pakistan ($17 billion), Bangladesh ($15 billion), Vietnam ($11 billion) and Ukraine ($9 billion).
As a share of GDP (2013), the top recipients of remittances were Tajikistan (42 percent), Kyrgyz Republic (32 percent), Nepal (29 percent), Moldova (25 percent), Lesotho and Samoa (24 percent each), Armenia and Haiti (both 21 percent), the Gambia (20 percent) and Liberia (18 percent).
In a special analysis on forced migration, the brief notes that forced migration due to conflict is at its highest level since World War II, affecting more than 51 million people. An additional 22 million people have been forced to move due to natural disasters, bringing the total affected by forced migration to at least 73 million, according to the latest available data.