The International Monetary Fund (IMF) has projected a significant economic contraction for Nigeria which is Africa’s top oil exporter with GDP seen falling 5.4% this year after an earlier forecast for a 3.4% contraction.
Nigeria faces economic distress not only from the coronavirus outbreak but also from a sharp fall in crude prices.
Nigeria’s government has said it expects its economy to contract by 3.4% this year. However, last month Nigeria’s finance minister said the economy could shrink by as much as 8.9% in 2020 in a worst-case scenario.
Meanwhile, the cost of living in Nigeria has risen steadily. Annual inflation rose for the ninth straight month in May, to a two-year high of 12.4%.
Meanwhile, according to a report from Reuters, the International Monetary Funds projected that Sub-Saharan Africa’s gross domestic product is expected to shrink by 3.2% this year due to the impact of the COVID-19 pandemic, , more than a previous estimated contraction of 1.6%.
In its World Economic Outlook update released this Wednesday , the IMF projected that GDP in South Africa, the continent’s most advanced economy, would shrink by 8% in 2020, a bigger contraction than the 5.8% forecast in April.
South Africa’s strict nationwide lockdown, imposed in late March to curb the spread of the novel coronavirus, sharply curtailed production across key sectors such as mining and retail, further hobbling an economy already in recession.
The lockdown remains in place, but some restrictions have been eased to allow key sectors to resume operations.