The World Bank has projected that Nigeria’s economic outlook would remain tough in the short run due to the persistent low price of crude oil in the international market.
The global banking regulator in its Nigeria Economic Report 3, released recently in Abuja, stated that for the country’s economy to survive within this period, fiscal adjustment will be of critical importance, warning that even if oil prices recover, government oil revenues should continue to decline in the medium term relative to the size of the Nigerian economy.
In the report presented by its Lead Economist for Nigeria, John Litwack, the World Bank, however, noted that investors are currently willing to bring considerable investment to Nigeria if they receive credible signals from the new government of commitments to policy directions and regulations consistent with strong private sector growth.
It said: “Sharp declines in oil prices since the second half of 2014 can be associated with slower growth, falling budgetary revenues, and pressures on the Naira. The short-term outlook for the Nigerian economy continues to be modest in the light of the difficult adjustment to lower oil prices.”
“Nigeria has the opportunity to build a foundation to support growth and rapid development over the medium and longer term.” The World Bank further called on the Federal Government to remove the subsidy on petroleum products, stating that the uncertainty about the fuel subsidy, in addition to its negative impact on Nigeria’s economy, has strongly discouraged investment in domestic oil refining.