Nigeria’s economic growth is expected to slow by 0.3 percentage points, from 3.2% in 2023 to 2.9% in 2024, according to the International Monetary Fund.
This is how the global money lender stated that the country’s economy will grow from 3.0 percent in 2022 to 3.2 percent in 2023 due to measures taken to address insecurity in its oil sector.
In addition, this year’s 3.2 percent growth projection is an update to the lender’s previous growth projection of 3.0 for the year in its October outlook report.
The IMF revealed this in its World Economic Outlook Update (January 2023) report. He stated that growth in sub-Saharan Africa would moderate to 3.8% in 2023 amid the protracted fallout from the COVID-19 pandemic.
Power shortages are expected to reduce the growth of the South African economy from 2.6% in 2022 to 1.2% in 2023.
He said: “In sub-Saharan Africa, growth is projected to remain subdued at 3.8 percent in 2023 amid the protracted fallout from the COVID-19 pandemic, albeit with a modest upward revision from October, before rising to 4.1 percent in 2024.
“The small upward revision for 2023 (0.1 percentage points) reflects Nigeria’s increasing growth in 2023 due to measures to address insecurity issues in the oil sector. In South Africa, by contrast, after a re-opening rebound from COVID-19 in 2022, growth was projected to more than halve in 2023, to 1.2 percent, reflecting weaker external demand, shortages of energy and structural constraints”.
The Washington-based lender explained that global economic growth will slow in 2023 before picking up in 2024. This is because the global fight against inflation and Russia’s war in Ukraine weigh on activity.
Growth is forecast to slow from 3.4% in 2022 to 2.9% in 2023, and then recover to 3.1% in 2024.
According to the lender, its January forecast is much less bleak than its October forecast and could hint at a turning point, with growth bottoming out and inflation easing.
He said: “Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust domestic consumption and business investment, and a better-than-expected adaptation to the energy crisis in Europe.
“Inflation also showed improvement, with headline measures now declining in most countries, even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries. .
Elsewhere, China’s sudden reopening paves the way for a quick rebound in activity. And global financial conditions have improved as inflationary pressures began to ease. This, and the weakening of the US dollar from its peak in November, provided modest relief to emerging and developing countries.
According to the IMF, monetary policy tightening is beginning to cool demand and inflation, but its full impact is unlikely to materialize before 2024. It added that around 84 percent of countries are expected to experience inflation. lower overall in 2023 with inflation expected to fall from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024.
The United Nations recently projected that strong commodity trade and dynamic markets for consumer goods and services would propel Nigeria’s economic growth to three percent by 2023.
He said: “High inflation and energy supply problems are affecting growth in Nigeria, but the economy will benefit from strong commodity trade and dynamic markets for consumer goods and services, taking growth to three percent. cent in 2023”.
In its own prediction for 2023, the World Bank claimed that the Nigerian economy would grow by 2.9% in 2023.
According to the bank, the meager economic growth of 2.9% in 2023 is barely above population growth.
In 2022, crude oil production in Nigeria plummeted due to the activities of pipeline vandals and oil thieves. Production fell to a low of 0.937 mbpd in September 2022, but recovered to 1.235 million barrels per day in December 2022.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the Federal Government is targeting an economic growth rate of 3.5 percent.
He stated that the performance of the non-oil sector and the rebound in the oil sector would boost growth in 2023.
Speaking to Bloomberg TV at the World Economic Forum in Davos, Switzerland, he said: “Well, for 2023 we’re looking at 3.5 percent growth and we’re looking to close out 2022 with about the same number as well. We are still waiting for our last quarter report to come out.
“Growth has slowed a bit in the third quarter of 2022 and therefore we have had to moderate our annual projections to reflect that drop. What will drive 2023 is the increase in revenue from the non-oil sector and also the beginning of the rebound in revenue from the oil sector itself.
“I’m sure you know we’ve had some issues with regards to production, but production has picked up and is looking good to hit the number we budgeted for. Our goal for 2023 is 1.6 million barrels per day. We can do it comfortably. We are around 1.25 million, 1.3 million now on average. We should be able to reach that and hopefully we also surpass that with the measure that has been put in place.”