Oil Prices May Slow down Nigeria’s Economic Growth – AEO

Experts at the African Economic Outlook have said that Oil and Commodity prices, Ebola outbreak may slow down the economic growth of Nigeria and other African countries.

The AEO, a product of collaborative work by three international partners: the African Development Bank (AFDB), the OECD Development Centre and the United Nations Development Programme (UNDP) presents the current state of economic and social development in Africa and projects the outlook for the continent.

In a report, AEO said “The world economy is improving and if the AEO 2015 predictions are right, Africa will soon be closing in on the impressive growth levels seen before the 2008-09 global economic crises.

“There are surprising regional differences. West Africa achieved relatively high growth of 6 per cent in 2014 despite its battle with the Ebola virus.

“Nigeria’s growth of 6.3 per cent came mainly from non-oil sectors showing that the economy is diversifying. But Southern Africa’s growth fell below 3 per cent as the key South African economy only grew by 1.5 per cent.

“On the demand side, the boost has come from private consumption and infrastructure investment. So far African economies have been relatively resilient to the sharp fall of international commodity prices. Production has often increased despite the lower prices, and growth has also been boosted by other sectors.

“But if commodity prices remain low or decline further, growth shortfalls in resource-rich countries would increase as governments need to cut spending. Governments will be keeping a close watch on conditions in key markets, especially Europe and China.

“In countries where inflationary pressures have eased, policy interest rates have been reduced to stimulate growth. Yet in several countries exchange rates came under pressure and central banks responded by tightening policies to stabilise exchange rates and contain inflation.

“Most African countries continued their prudent fiscal policies to keep budget deficits at sustainable levels. But in several countries, including oil exporters, fiscal positions weakened despite efforts to limit spending and to improve tax revenues.”