Buhari ill health causing uncertainty in Nigeria - IMF

International Monetary Fund (IMF) in its report on Monday that Nigeria and South Africa are the biggest economies south of the Sahara, but both nations have been clouded by political uncertainty linked to the tenure of their leaders.

The IMF said a good harvest and recovery in oil output in Nigeria would contribute more than half of the growth in the region this year but political uncertainty looms large in Nigeria, where President Muhammadu Buhari is afflicted by illness, causing speculation about whether he is well enough to run Africa’s biggest economy.

The body said that there will be an uptick in mining and a better harvest in South Africa as well as a rebound in oil production in Angola will add to the Economic growth in sub-Saharan Africa, which is expected to rise to 3.4 percent next year from 2.6 percent in 2017.

South Africa has been clouded by the rule of Jacob Zuma, who has battled scandals, including corrupt allegations, ahead of his ANC party’s conference in December to elect a new party leader.

IMF further reiterated that “Key downside risks to the region’s growth outlook will emanate from the larger economies, where elevated political uncertainty could delay needed policy adjustments and dampen investor and consumer confidence,” in a report released in Harare.
“A further pickup in growth to 3.4 percent is expected in 2018, but momentum is weak and growth will likely remain well below past trends in 2019.”

Jacob Zuma and Muhammadu Buhari

IMF therefore urged Nigeria and the rest to help maintain growth, countries should diversify from dependence on commodities and oil, implement fiscal reforms to stimulate growth and attract private investment.

The IMF said public debt would rise to 53 percent of GDP this year from 48 percent in 2016. More worryingly, most countries were now borrowing from local banks, which could destabilize the domestic financial sector and fuel inflation.

Source(s): AP, Reuters