The World Bank revealed that Nigeria’s GDP growth rate is expected to slow to 2.9 percent in 2023 and stay at that rate in 2024, just above population growth.
world Bank revealed this in its Global Economic Prospects report released Tuesday night.
They noted that growth in sub-Saharan Africa is projected to rise in 2023 to 3.6 percent before rising to 3.9 percent.
Nigeria: The World Bank stated that growth momentum in the non-oil sector is likely to be constrained by continued weakness in the oil sector.
- In Nigeria, growth is projected to slow to 2.9% in 2023 and remain at that rate in 2024, just above population growth. Growth momentum in the non-oil sector is likely to be constrained by continued weakness in the oil sector.
- Existing production and security challenges and moderation in oil prices are expected to hamper recovery in oil production. Political uncertainty kept inflation high and the rising incidence of violence is expected to dampen growth.
High borrowing costs: The Bank added that Nigeria’s fiscal position will remain weak due to high borrowing costs and lower energy prices.
- “Agricultural growth is expected to soften due to damage from last year’s floods. The fiscal position is expected to remain weak due to high borrowing costs, lower energy prices, slow growth in oil production, and subdued activity in non-oil sectors.
sub-saharan africa: They revealed that the rest of the continent is expected to perform better, citing that the expected moderation in global commodity prices should moderate cost-of-living increases.
- “Growth in SSA is projected to rise in 2023 to 3.6 percent, a downward revision of 0.2 percentage points from the June forecast, before rising to 3.9 percent, in 2024.
- “While the expected moderation in global commodity prices should moderate cost-of-living increases, tougher policy stances to address high inflation and public debt will weigh on domestic demand.
- “Meanwhile, weakening growth in advanced economies and China is expected to pose headwinds for external demand, particularly among exporters of industrial commodities. Restricted access to external financing, reduced fiscal space, and high borrowing costs are expected to severely limit the ability of many governments to drive faster growth..
The report also found that among oil-producing countries, public debt fell by almost 10 percent of GDP on average, due to fiscal surpluses and stronger exchange rates.
Conversely, however, debt sustainability and investor confidence deteriorated further in many other countries, leading to higher borrowing costs (credit spreads widened markedly in several countries, for example , in Ghana and Zambia) Capital outflows, credit rating downgrades (Ghana, Nigeria), and large currency depreciations.
“Funding gaps also became increasingly challenging, with international bond issuance by governments in the region stalling in the second half of last year,” they added.
what you should know
Finance Minister Zainab Ahmed, during the presentation of the 21.8 trillion naira budget for 2023, stated that Nigeria’s GDP growth rate is expected to be 3.75% for the year.
ahmed said real GDP it is projected to be 3.75% in 2023, compared to 4.47% projected in the medium-term development plan.
- “Growth is expected to moderate to 3.3% in 2024 before rising to 3.46% in 2025, the inflation rate is expected to average 17.16% in 2023. Therefore, we expect inflation to moderate and begin to decline, and by the end of 2023 it should average 17.16% and decrease to 15.93%”.
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