Khan: Nigeria, S’Africa to Propel Africa’s Growth

Ms. Razia Khan

Dike Onwuamaeze and Peter Uzoho

Standard Chartered Bank’s Chief Economist for Africa and Middle East,
Ms. Razia Khan, has projected a three per cent economic growth for
Nigeria in 2020. Khan, also projected that for the first time the Sub
Saharan Africa (SSA) would witness accelerated growth even as the
global growth was predicted to decelerate. She also said that SSA
growth would be powered by Nigeria and South Africa’s economies.
She said this during her presentation of Nigeria’s 2020 economic
outlook, held in Lagos, yesterday.

Khan’s projected economic growth for Nigeria was slightly above the
2.9 percent growth rate President Mohammadu Buhari proposed in the
2020 budget.

According to her, “2020 is a year we might see SSA economies growing
faster in the face of slowing global economy. Growth in the SSA will
be driven by the two largest economies in Africa, namely Nigeria and
South Africa.”

She predicted that oil price stability and increased crude oil
production would power Nigeria’s economic growth 2020.
“We have positive view on Nigeria’s growth because of developments in
the fiscal and monetary sectors that will drive more expansion in the
Nigerian economy. We have not lowered our Nigeria’s GDP and oil price

One of the monetary policy stance of the Central Bank of Nigeria (CBN)
that would bolster the economy in 2020, according to Khan, was the
push for increased private sector lending, which has since unlocked N2
trillion in to the economy.

She also noted that the return of Nigeria’s budget cycle to
January-December and early implementation of the fiscal policy tool
would enhance the execution of capital projects.

“The difference in 2020 is that Nigeria has reverted to normal budget
cycle as early implementation of capital projects will add stimulus to
the economy.”

Other developments she identified that would encourage economic growth
in 2020 were the enactments of Petroleum Sharing Contract Act of 2019
and the Finance Act 2019 that increased the Value Added Tax by 50 per
cent, from five to 7.5 per cent.

However, Khan warned that the ability to ensure compliance to the
above legislations would be where the challenge lies for the federal
government, adding that previous VAT collection did not meet
government’s projected revenue earning from it.

The Standard Chartered Bank’s chief economist also warned Nigeria to
do away with the its age-long sharing of oil revenue every month
during FAAC, and focus on diversifying the economy so as to earn more
revenue from other sources.
She also noted that Nigeria’s problem was not high debt burden, but
low revenue mobilisation.

She also projected that a prolonged case of the coronavirus would
affect demand for oil and might add pressure on Nigeria’s foreign
exchange market.

She, however, noted that the expectation of better GDP performance in
2020 would also depend on return of positive momentum capable of
building confidence and attracting private sector investments to make
Nigeria economy grow by offering them higher rate on return.