Nigeria’s economy will most likely contract this year as energy shortages and the delayed budget weigh on output, the International Monetary Fund has said.
“I think there is a high likelihood that 2016 as a whole will be a contractionary year,” the IMF Country Representative in Nigeria, Gene Leon, said.
While the economy should look better in the second half of the year, growth will probably not “be sufficiently fast, sufficiently rapid to be able to negate the outcome of” the first and second quarters, he added.
The nation’s Gross Domestic Product shrunk by 0.4 per cent in the three months through March, the first contraction in more than a decade, as oil output and prices slumped and the approval of spending plans for 2016 was delayed.
A currency peg and foreign-exchange trading restrictions, which were removed last month after more than a year, led to shortages of goods from fuel to milk and contributed to the contraction in the first quarter.
Leon said while conditions that impeded growth in the first half of the year might have been reduced, they still weighed on the economy, Bloomberg reported.
