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The International Monetary Fund (IMF) has warned that Nigeria’s projected growth may not be enough to create jobs for the country’s growing population.

The IMF, in its World Economic Outlook 2018, noted: “Nigeria’s projected economic growth in the sub-Sahara Africa from 3.1 per cent this year to 3.8 per cent in 2019 is not enough to create the needed jobs for the growing population of the region.”

This projected growth, the Fund cautioned, may not be enough for the attainment of the Sustainable Development Goals, “if the trend remains for a while”.

The three leading economies of the continent, Nigeria, South Africa and Angola were projected “to witness sluggish growth in 2019 and beyond. Nigeria will grow from 1.9 per cent in 2018 to 2.3 percent in 2019. South Africa and Angola are projected to move from 0.8 to 1.4 and -0.1 to 3.1 per cents.”

IMF’s Chief Economist and Director of Research Maurice Obstfeld told journalists that “what affects the three major economies affect the whole continent as majority of the countries relies on their trajectories”.

He admitted that the continent “will witness growth next year but the growing number of working class coupled with less jobs opportunities, huge public debts and poor infrastructure present a challenge in achieving the developmental goals of the United Nations”.

Milesi Ferretti, Deputy Director Research, said while presenting the report that “the continent could do much better once these economies are on a more solid footing, particularly South Africa and Nigeria, because they are really large and affect a number of countries in their neighbourhood.”

On the global ratings, IMF cut its global growth forecasts as a result of the trade tensions between the U.S. and trading partners. The Outlook said the global economy is expected to grow at 3.7 percent this year and next year — down 0.2 percentage points from an earlier forecast.

“We are concerned about the downturn in economic growth,” noted Jubilee USA Executive Director Eric LeCompte. As a finance expert, LeCompte has tracked IMF meetings for nearly 10 years and is attending the meetings in Bali. “The report reminds us that inequality remains a serious problem and we still are not safe from financial crisis,” he warned.

“We are seeing a growing debt crisis in many developing economies,” stated LeCompte who also serves on United Nations expert groups that focuses on economic issues. “At the same time, we see risky and speculative behaviour on the rise. We know that risky behaviour and unsustainable debt is a recipe for financial crisis.”

The IMF issues the report ahead of the Annual IMF and World Bank meetings where world leaders, finance ministers and non-governmental organisations will gather this week in Bali, Indonesia.

This year, the World Bank Group has committed nearly $67 billion in financing, investments, and guarantees most of which have gone to assist the poorest countries, its President and Chairman of the Board of Executive Directors Dr. Jim Yong Kim stated in his presentation of the 2018 World Bank Annual Report at the ongoing International Monetary Fund (IMF)/World Bank Meetings in Bali, Indonesia yesterday.

He said the International Bank for Reconstruction and Development (IBRD) continued to see strong demand from clients for its services, with commitments rising to $23 billion in fiscal 2018. The International Development Association (IDA) has made its largest ever financial commitment of $24 billion to help the poorest countries.

Jim Yong Kim described 2018 with the $24 billion financial support for the poorest countries as “the largest year of IDA commitments on record”.

Other financial assistance rendered by the World Bank in 2018, he noted, includes: the International Finance Corporation (IFC) provision of more than $23 billion in financing for private sector development this past year, including $11.7 billion mobilised from investment partners. Of this, nearly $6.8 billion went to IDA countries, and more than $3.7 billion was invested in areas affected by fragility, conflict, and violence.

Jim Yong Kim also revealed that the Multilateral Investment Guarantee Agency (MIGA) has become the third leading institution among the Multilateral Development Banks (MDBs) “in terms of mobilising direct private capital to low- and middle-income countries. This year, MIGA issued a record $5.3 billion in political risk insurance and credit enhancement guarantees, helping finance $17.9 billion worth of projects in developing countries. New issuances and gross outstanding exposure—at $21.2 billion this year—almost doubled as compared to fiscal 2013,” he said.

Kim said the World Bank would unveil the Human Capital Index, which will rank countries according to how well they are investing in the human capital of the next generation.

The ranking, he explained, “will put the issue squarely in front of heads of state and finance ministers so they can accelerate investments in their people and prepare for the economy of the future.”

Around the world, demand he said “continues to rise for financing, expertise, and innovation. The needs are great—but the costs of failure are simply too high”.

As a result, the shareholders of the World Bank, the President said, “are helping us meet that challenge with their approval of a historic $13 billion capital increase, which will strengthen the World Bank Group’s ability to reduce poverty, address the most critical challenges of our time, and help our client countries—and their people—reach their highest aspirations.”

To accelerate inclusive, sustainable economic growth, the world he said, will “need a new vision for financing development—one that helps make the global market system work for everyone and the planet”.

“In a world where achieving the Global Goals will cost trillions every year, but official development assistance is stagnant in the billions, we cannot end poverty without a fundamentally different approach,” he said.

Secondly, to build resilience to shocks and threats—even as the world continues developing climate-smart infrastructure and improving response systems Jim Yong Kim canvassed for “innovative financial tools to help poor countries do what wealthy ones have long done: share the risks of crises with global capital markets”.

Following the outbreak of Ebola in the Democratic Republic of Congo, the World Bank, according to him, facilitated “the Pandemic Emergency Financing Facility (PEF) with a rapid grant to support the Ebola response surge in the Democratic Republic of Congo. With this facility—and a similar one we are developing to improve responses to and prevent famine—we are finding new ways to help the poorest countries share risks with financial markets, helping break the cycle of panic and neglect that often occurs with crises.”

The IMF called on Nigeria, South Africa and Angola to ensure solid economic footing to accelerate African economic growth.

IMF Chief Economist Maurice Obstfeld made this call yesterday in Bali, Indonesia at the unveiling of the October 2018 World Economic Outlook, a publication of the IMF.

He observed that their proper footing would check impediment of the growth of the African economy.


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