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IMF says Nigeria’s economy will contrast 1.8% 2016

The International Monetary Fund (IMF) has said that it expects Nigeria’s economy to contract by 1.8 per cent this year as against its forecast in April that it would record an expansion of 2.3 per cent adding that a combination of factors such as plunging oil revenues and weakened investor confidence may push it into recession.

According to IMF, Nigeria’s stall, and sluggish activity in the number two economy, South Africa, is expected to pull down economic growth across sub-Saharan Africa, the IMF said, forecasting a “dramatic implication.”

“In 2016, regional output growth will fall short of population growth, implying declining per capita incomes,” it said.

Nigeria’s economy has been battered hard by the plunge in oil prices, the main source of the country’s income, as well as prices of other key commodities.

In addition, rebels in the southern oil region have forced crude production cutbacks, and internal unrest, especially attacks by the Boko Haram group in the north, has also hurt the economy.

Inflation hit an 11-year high of 16.5 percent in June  according to the National Bureau of Statistics (NBS) as prices of food and energy jumped after the government freed up the naira currency in April, making it to plummet against the US dollar.

Also weighing on output have been electricity shortages due to rebels’ sabotage of the gas pipelines that fire power plants.

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