Nigeria’s Economy To Grow At 3.3% In 2024, World Bank Projects

The World Bank has projected Nigeria’s economy to grow at 3.3 per cent this year, about 0.4 percentage points higher than the 2.9 per cent it is expected to have closed last year.

The projection is slightly behind that of sub-Saharan Africa (SSA), which is to expand by 3.8 per cent but far modestly above the estimated global average (2.3 per cent).

In its Global Economic Prospect (GEP), the World Bank remains bullish on Nigeria, with the economy expected to firm further to 3.7 per cent next year, over one percentage mark-up over global output growth.

The latest projections for 2024 and 2025 are way above June forecasts, which were three and 3.1 per cent respectively, re-validating the global bank’s rising confidence in the prospect of the economy since downstream oil and foreign exchange reforms that started the mid-last year.

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The bank said the macro-fiscal reforms that started in June are gradually bearing fruits, saying per capita income will reach its pre-pandemic level in 2025. Growth, it noted, would be driven mainly by agriculture, construction, services and trade.

According to the report, Nigeria’s inflation will “gradually ease as the effects of last year’s exchange rate reforms and removal of fuel subsidies fade” with the structural reforms expected to boost fiscal revenue.

“Growth in SSA is expected to accelerate to 3.8 per cent in 2024 and firm further to 4.1 per cent in 2025 as inflationary pressures fade and financial conditions ease. The projections for regional growth in 2024 and 2025 are little changed from June forecasts, but these aggregates mask a mix of upgrades and downgrades at the country level.

“While growth in the largest economies in SSA is expected to lag the rest of the region, non-resource-rich economies are forecasted to maintain a growth rate above the regional average. Excluding the three largest SSA economies, growth in the region is expected to accelerate from 3.9 per cent in 2023 to 5 per cent in 2024 and a further 5.3 per cent in 2025,” the report said about Africa.

The report said this year would mark the slowest growth in 30 years but that the global economy is in a better stead than it was a year ago.

It cautioned that the mounting geopolitical tensions could create fresh near-term hazards for the world economy if adequate measures are not taken.

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity. Near-term growth will remain weak, leaving many developing countries – especially the poorest – stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people.

That would obstruct progress on many global priorities. Opportunities still exist to turn the tide.

This report offers a clear way forward: it spells out the transformation that can be achieved if governments act now to accelerate investment and strengthen fiscal policy frameworks,” World Bank Group’s Chief Economist and Senior Vice President, Indermit Gill, said.