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World Bank Cuts Nigeria’s 2023 Economic Growth Projection to 2.9%

Citing currency pressure, insecurity, and other challenges, the World Bank Group Wednesday, revised its economic growth outlook for Nigeria in 2023, to 2.9 per cent, lower than its earlier projection of 3.3 per cent for the West African country.

This was revealed in the multilateral institution’s latest ‘Africa Pulse,’ a regional macroeconomic outlook released on Wednesday, where it noted that Sub-Saharan Africa’s economic outlook remained bleak amid an elusive growth recovery.

Nigeria and Angola are leading oil producers in Africa.

It noted that rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy were dragging down growth prospects in the region.

The report forecasted a deceleration of economic growth in Sub-Saharan Africa to 2.5 per cent in 2023, from 3.6 per cent in 2022.

The Washington-based institution stated: “South Africa’s GDP is expected to only grow by 0.5 per cent in 2023 as energy and transportation bottlenecks continue to bite. Nigeria and Angola are projected to grow at 2.9 per cent and 1.3 per cent respectively, due to lower international prices and currency pressures affecting oil and non-oil activity.

“Increased conflict and violence in the region weigh on economic activity, and this rising fragility may be exacerbated by climatic shocks.

“In Sudan, economic activity is expected to contract by 12 per cent because of the internal conflict which is halting production, destroying human capital, and crippling state capacity.” 

In per capita terms, the World Bank report noted that growth in Sub-Saharan Africa has not increased since 2015.

In fact, the region, it added, was projected to contract at an annual average rate per capita of 0.1 per cent over 2015-2025, thus potentially marking a lost decade of growth in the aftermath of the 2014-15 plunge in commodity prices.

Commenting, World Bank Chief Economist for Africa, Andrew Dabalen said: “The region’s poorest and most vulnerable people continue to bear the economic brunt of this slowdown, as weak growth translates into slow poverty reduction and poor job growth.

“With up to 12 million young Africans entering the labor market across the region each year, it has never been more urgent for policymakers to transform their economies and deliver growth to people through better jobs.”

Despite the gloomy outlook, the bank noted that there were few bright spots, adding that inflation was expected to decline from 9.3 per cent in 2022, to 7.3 per cent in 2023.

Fiscal balances, it stated, were improving in African countries that are pursuing prudent and coordinated macroeconomic policies.

“In 2023, the Eastern African community (EAC) is expected to grow by 4.9 per cent, while the West African Economic and Monetary Union (WAEMU) is set to grow by 5.1 per cent.

“However, debt distress remains widespread with 21 countries at high risk of external debt distress or in debt distress as of June 2023.

“Overall, current growth rates in the region are inadequate to create enough high-quality jobs to meet increases in the working-age population. Current growth patterns generate only three million formal jobs annually, thus leaving many young people underemployed and engaged in casual, piecemeal, and unstable work that does not make full use of their skills,” the World Bank report said.

It further submitted that creating job opportunities for the youth would drive inclusive growth and turn the continent’s demographic wealth into an economic dividend.

“The urgency of the jobs challenge in Sub-Saharan Africa is underscored by the huge opportunity from demographic transitions that we have seen in other regions.

“This will require an ecosystem that facilitates private-sector development and firm growth, as well as skill development that matches business demand,” said Nicholas Woolley, World Bank Economist and contributor to the report.

Ndubuisi Francis and Nume Ekeghe

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