Business

With 2.8% Growth Prediction, World Bank Urges Nigeria to Ease Trade Barriers

The President of the World Bank Group, David Malpass, on Thursday, predicted that Nigeria’s Gross Domestic Product (GDP) would grow at 2.8 per cent in 2023, just as he advised Nigeria’s policymakers to ease trade restrictions and take more steps towards diversifying the economy in order to achieve shared prosperity and sustainable growth.

In addition, he said Nigeria should focus on improving electricity, access to clean water, and more investment in agriculture which according to him would help trigger faster growth.

This was just as the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, pointed out that talks from the roundtable on debt initiated by the multilateral institution would help ensure debt sustainability assessment, improve debt restructuring process and ease debt burden for countries.

They both spoke during separate press briefing at the ongoing IMF/World Bank Spring Meetings in Washington DC.
Malpass said: “For Nigeria, the growth was 3.3 per cent in 2022 and 2.8 per cent in 2023, within our forecast, and our high priority for the World Bank is shared prosperity in a sustainable way.

“And so, as we think about Nigeria, there are many changes that are needed in order to allow that process to proceed. Nigeria has a big chunk of its GDP is oil and it means that a lot of people in Nigeria are facing poverty and that needs to be redirected.

“And they also face insecurity across the northern and western regions and its very challenging. And so, the World Bank is working hard within Nigeria, but also working to have an economic system that can be more productive.

“Nigeria has trade protection that blocks market development. They have a dual exchange rate that is very expensive for the people of Nigeria to maintain that dual exchange rate system. They have high inflation and not enough diversification of the economy to really make sufficient progress.”

He further advised policymakers in Nigeria and other Sub-Saharan African countries to focus on policies that would enhance inclusive growth while using India as a case study of a country that has recorded improved electricity supply, investments in agriculture and investments in infrastructure.

For her part, Georgieva added that the global sovereign debt roundtable held on Tuesday, and has already recorded progress. This, she said was expected to ensure that countries with high debt profile have their debt restructured in a manner that gives room for growth.

She said: “We have to be mindful of our duties to them and I want to make a double plea on their behalf. Help them resolve crushing debt burdens and help ensure that the IMF can continue to support them going forward.

“On the first, we now have the global sovereign debt roundtable. It is making tangible progress co-chaired by the World Bank, IMF in India as G20 chair, we can group together public and private creditors as well as borrowers first time all of them sitting around the table to accelerate restructuring cases, including those that are covered in the G20 common framework but also those that are not covered by the framework and are pressing.

“We met yesterday, I was very encouraged by the positive outcomes. Firstly, we agreed to improve information sharing of macroeconomic projections and debt sustainability assessment at an early stage of the debt restructuring process.

“Secondly, we reached a common understanding on the role that can be played. Thirdly, we now have a clear work stream, including the workshop in the next weeks on how to assess any false compatibility of treatment. The main purpose is to accelerate and restructure.”

She added: “We could not reach an agreement yesterday, although the aim was not to reach an agreement. So, what we have concluded was that we have to identify principles for how timelines have been set.

“We have agreed that there would be a case-by-case decision, but this case-by-case decision will need to be within defined timelines and parameters and that will be the next agenda for us in the next round of our engagement.”

She further noted that strong policy actions were needed together with pragmatic approaches to respond to shared challenges which would aid safeguard economic and financial stability.

Obinna Chima, Nume Ekeghe, Funke Olaode and Ugo Aliogo in Washington DC