The World Bank says Nigeria’s economic growth projection for 2023 has dropped from its previous 3.1 per cent to 2.9.
It explained that this is due to production challenges in the oil sector, rising insecurity, and flooding.
The bank explained in its latest ‘Global Economics Prospects’ Report that, “In Nigeria, growth is projected to decelerate to 2.9 per cent in 2023 and remain at that pace in 2024 barely above population growth.
“A growth momentum in the non-oil sector is likely to be restrained by continued weakness in the oil sector. Existing production and security challenges and a moderation in oil prices are expected to hinder a recovery in oil output.
“Policy uncertainty, sustained high inflation, and rising incidence of violence are anticipated to temper growth. Growth in agriculture is expected to soften because of the damage from last year’s floods.
“As fiscal position is expected to remain weak because of high borrowing costs, lower energy prices, a sluggish growth of oil production, and subdued activity in the non-oil sectors.”
The apex bank also said a sharp, long-lasting slowdown was expected to hit developing countries hard this year as the global economy weakens.
According to the bank, the 2023 global growth is expected to slow to 1.7 per cent — a downgrade from three per cent earlier projected in June 2022.
It, therefore, warned that shocks, including higher-than-expected inflation, and sudden spikes in interest rates to contain price increases, or a pandemic resurgence could tip the global economy into a recession.
“Given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions — could push the global economy into a recession,” the report stated.
“This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.
“The global economy is projected to grow by 1.7 per cent in 2023 and 2.7 per cent in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95 percent of advanced economies and nearly 70 per cent of emerging market and developing economies.”
For Sub-Saharan Africa (SSA), the region which accounts for about 60 per cent of the world’s extreme poor, the bank said growth in per capita income over 2023-24 is expected to average just 1.2 percent, a rate that could cause poverty rates to rise.