The International Monetary Fund (IMF) has said Nigeria could lose an estimated $10bn of foreign direct investment and official development assistance inflows to geo-political tensions.
The IMF in its country focus on Sub-Saharan Africa, released on Monday, said the figure is about a half per cent of the nation’s annual Gross Domestic Product.
The Washington-based lender said, “The losses could be compounded if capital flows between trade blocs were cut-off because of geo-political tensions. The region could lose an estimated $10bn of foreign direct investments and official development assistance inflow is about half a percent of GDP a year based on an average 2017–19 estimate). The reduction in FDI, in the long run, could also hinder much-needed technology transfer.”
IMF further said that if geopolitical tensions were to escalate, countries could be hit by higher import prices or even lose access to key export markets.
It added that about half of Sub-Saharan Africa’s value of global trade could be impacted.
The Washington-based lender also said that Sub-Saharan Africa could stand to lose the most if the world split into two isolated trading blocs centered on China or the United States and the European Union.
The IMF added the region’s economy could experience a permanent decline of up to four percent of its gross domestic product after 10 years.