The Lagos Chamber of Commerce and Industry has said that the 2.5 per cent Gross Domestic Product growth for 2021, predicted by the International Monetary Fund, is based on assumptions.
The Director-General of LCCI, Muda Yusuf, said this in a chat with Financial Street in Lagos on Monday.
He expressed concern over looming insecurity that might hamper economic stability in the country.
The IMF had revised upward its growth forecast for the Nigerian economy in 2021 to 2.5 per cent from the projection of 1.5 per cent it announced in January.
According to IMF, with the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, but noted that imports are rebounding faster than exports and foreign investor appetite remains subdued, resulting in continued foreign exchange shortage.
Reacting to this, Yusuf said the predictions would stand, depending on the sustainability of the underlying assumptions.
“The IMF projection of 2.5 per cent GDP growth in 2021 will stand, depending on the sustainability of the underlying assumptions. Surely, the oil price outlook must have been a major factor. We have seen an uptrend in crude oil price in recent months. If this is sustained, the projection will stand.
“It is also hoped that the economy does not suffer any significant shock from a deterioration in the COVID-19 situation. Happily the pandemic spread was not as devastating as was initially feared. However, the ravaging insecurity in the country remains a major risk to the growth outlook,” he said.
Meanwhile, the chamber said a great deal of reforms need to take place in the foreign exchange policy space, the regulatory environment, the ports environment, and the trade policy regime, all of which are crucial to the strengthening of investors’ confidence.
The Nigerian economy exited recession in the fourth quarter of 2020 with a modest 0.11 per cent growth.
