Nigeria’s Economy to Grow by 3.3 Percent This Year – World Bank
The World Bank has projected that Nigeria’s economy will grow by 3.3 percent in 2024, reflecting a modest improvement in the nation’s economic trajectory. This forecast is part of the broader outlook for Sub-Saharan Africa, where the region is expected to experience a growth rate of 3.5 percent by the end of the year.
According to the recently released World Bank’s “Global Economic Prospects” report, the Nigerian economy is expected to recover from the shocks caused by President Bola Tinubu’s macroeconomic reforms and grow by 3.3 percent this year before increasing to 3.5 percent in 2025.
“Growth in Nigeria is projected to pick up to 3.3 percent this year and 3.5 percent in 2025. After the initial shock of the macroeconomic reforms, economic conditions are expected to gradually improve, resulting in sustained, but still modest, growth in the non-oil economy,” the World Bank said.
Challenges To Nigeria’s Projected Economic Growth
Although the report stated that the oil sector is expected to stabilise as production somewhat recovers, the country’s growth is still faced with challenges.
“Risks to Nigeria’s growth outlook are substantial, including the possibility that the tightening of monetary policy fails to rein in inflation,” the report said.
In late February 2024, Yemi Cardoso increased the Monetary Policy Rate (MPR) from 18.75 percent to 22.75 percent. A month later, the apex bank increased it again to 24.75 percent during a second Monetary Policy Committee meeting in Abuja on March 26, 2024. It was again increased to 26.25 percent in May. While the hike in interest rate was to check the country’s soaring high cost of living, inflation increased to 33.2 percent.
In the context of Sub-Saharan Africa (SSA), Nigeria remains a significant player, contributing substantially to the region’s economic performance. Although the region is projected to grow at 3.5 percent from 3.0 percent in 2023, the projection is somewhat weaker than what was forecast earlier in January.
This, the report claims, is due to the damaging effects of recent increases in political instability and conflict, which have delayed recovery in parts of the region.
However, despite these upward projections, the prevailing rate of poverty in the SSA region is not expected to decrease.
“The expected increase in per capita income is insufficient to make significant progress on poverty alleviation in the region,” the report said.
