{"id":3639,"date":"2013-05-14T10:25:27","date_gmt":"2013-05-14T10:25:27","guid":{"rendered":"http:\/\/disnaija.com\/nigeria-news\/world-bank-forecasts-rising-growth-in-nigerias-economy\/"},"modified":"2013-05-14T10:25:27","modified_gmt":"2013-05-14T10:25:27","slug":"world-bank-forecasts-rising-growth-in-nigerias-economy","status":"publish","type":"post","link":"https:\/\/disnaija.com\/world-bank-forecasts-rising-growth-in-nigerias-economy\/","title":{"rendered":"World Bank forecasts rising growth in Nigeria\u2019s Economy"},"content":{"rendered":"
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By Citizens Platform<\/strong><\/em><\/p>\n

The World Bank has stated that with the present state of Nigeria\u2019s short term macroeconomic outlook, inflation is expected to be reduced and a likely of higher growth in the economy.<\/p>\n

The World Bank in its new Nigeria Economic Report (NER) launched Monday in Abuja, states \u201cThis will present the Government with an opportunity to make progress in key reforms and public investments associated with the Transformation Agenda for job creation, diversification, and more effective governance\u201d.<\/p>\n

The NER however says that Nigeria\u2019s economic growth has not automatically translated into better economic and social welfare for Nigerians, as \u201cpoverty reduction and job creation have not kept pace with population growth, implying social distress for an increasing number of Nigerians\u201d.<\/p>\n

As part of its forecast for Nigeria, the NER also suggests that Nigeria will need to build up its fiscal reserve to protect the country from oil price volatility.<\/p>\n

It will also need to increase internally generated revenue to compensate for what will likely be declining oil revenues relative to the size of the economy.<\/p>\n

\u201cGiven that Nigerian GDP is growing much faster than oil output, and is experiencing significant inflation at a stable exchange rate, the size of Government oil revenues relative to GDP should decline even in the event that oil prices increase. This was already the case in 2012, as Government oil revenues fell from an estimated 23.6% to 19.7% of GDP. This decline may increase budgetary pressures and justifies a prudent fiscal stance\u201d according to the NER.<\/p>\n

The Nigeria Economic Report argues that the Nigerian Federalist System has the potential to support Nigeria\u2019s takeoff into rapid diversified growth and job creation, but the Federal and State Governments need to improve cooperation and policy coordination in a few key areas.<\/p>\n

These key areas include macroeconomic management (countercyclical fiscal policy); coordinated policies to enhance market connectivity and improve public services; and the realization of national standards in public financial management and disclosure.<\/p>\n

The NER suggests that the significant degree of autonomy and financial independence of Nigerian States can be potentially advantageous for rapid development in the country however this process is hindered \u201cby too little market connectivity, weak coordination in fiscal policy, and problems in governance\u201d. \u201cInvestors with the potential to set up large scale operations and create many jobs will be reluctant to do so if they cannot service a larger market. Under these conditions, a number of Nigerian States have limited opportunities to attract significant investors\u201d.<\/p>\n

It is argued that enhanced cooperation among the Federal and State Governments can successfully address all of these issues, thereby unlocking enormous potential for growth, job creation, and improvements in the welfare of Nigerian citizens.<\/p>\n

World Bank Lead Economist and author of the Economic report, John Litwack says \u201cFor effective macroeconomic management, the key task is to establish an institutional framework that can effectively separate and buffer Government expenditures from oil prices. International experience demonstrates that countercyclical fiscal policy is essential to conquer the oil curse of boom-bust cycles and slow economic development.\u201d Speaking on matching grants widely used in countries for the coordination of fiscal policies, the World Bank Country Director Marie-Francoise Marie-Nelly says \u201cThe expansion of federal programs involving co-financing or conditional\/matching grants for States around priority infrastructure and the implementation of national standards could help solidify needed trust and cooperation between different levels of Government and bring the best of Nigeria\u201d.<\/p>\n

\u201cTo be successful, these programs should build on state autonomy to promote constructive competition among them. International experience suggests that the conditionality of these grants should focus on outcomes rather than processes, i.e. the resources should be managed entirely by subnational Governments under the condition that certain objectives be reached.\u201d<\/p>\n

The first Nigeria Economic Report, released on May 13, 2013, contains a macroeconomic overview, an analysis of Government oil revenues and their potential allocations under various oil price assumptions through 2015, and a chapter on fiscal federalist relations and Nigeria\u2019s economic development.<\/p>\n

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Posted in Nigeria News. <\/a>A DisNaija.Com<\/a> network.<\/p>\n

Source: Citizens Platform<\/p>\n

DisNaija.Com<\/b> publishes regular posts on Nigeria News,<\/a> Nigerian Newspapers,<\/a> Online Nigeria Gist.<\/a><\/p>\n

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