Nigeria Boost Sees IMF Lifting Sub-Saharan Africa Growth Outlook

(Bloomberg) -- Sub-Saharan Africa has Nigeria to thank for better economic growth prospects next year.

The region’s economy will probably expand 3.8 percent in 2019, the International Monetary Fund said in its World Economic Outlook update released Monday. That compares with a 3.7 percent prediction in April.

Nigeria Boost Sees IMF Lifting Sub-Saharan Africa Growth Outlook

The upgraded forecast “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. Gross domestic product in Africa’s most-populous nation will probably rise 2.3 percent, it said, lifting its estimate from 1.9 percent in April.

Nigeria’s economy is recovering from the worst contraction in 25 years in 2016, which was caused by lower oil prices and output and shortages of foreign exchange to import raw materials.

The IMF held its predictions for South Africa’s economy, saying it will expand 1.5 percent this year and 1.7 percent the next.

‘Improving Confidence’

“Despite the weaker-than-expected first-quarter out-turn in South Africa, the economy is expected to recover somewhat over the remainder of 2018 and into 2019 as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the fund said.

South Africa, the continent’s most-industrialized economy, hasn’t grown at more than 2 percent a year since 2013. GDP shrank the most in almost a decade in the first quarter as former President Jacob Zuma handed the reins to Cyril Ramaphosa. Zuma spent close to nine years in power, during which time the nation lost its investment-grade credit rating and policy uncertainty and unemployment increased.

Nigeria and South Africa’s economies account for about half of the region’s GDP.

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