The International Monetary Fund (IMF) cuts again its growth forecast for Nigeria as the oil exporter faces “substantial challenges” due to low crude prices. In its annual review of Nigeria’s economic situation, the IMF said that gross domestic product growth would slow to 2.3% in 2016, down from 3.2% estimated by IMF officials in February, The Star reported. The forecast is even lower than 2.7% estimated for 2015.
Meanwhile, the executive board of the fund said that it expected economic recovery Nigeria to be modest in the medium term, but with significant down risks. It said that the risks included shortfalls in non-oil revenues, deterioration in finances of state and local governments, deepening disruptions in private sector activity due to constraints on access to foreign exchange, and resurgence in security concerns, Africa News reported.
The IMF said it stands ready to help sub-Saharan Africa’s oil exporters cope with plunging crude prices and growing fiscal pressures but has not received any new funding requests from the region. Nigeria, the largest African economy and largest crude exporter, has instead turned to the World Bank for assistance, even though the IMF is typically viewed as the world’s go-to crisis lender.