To hit 3.1% in 2024
The International Monetary Fund (IMF) has downgraded Nigeria’s economic growth by 0.3 per cent. According to the report, ‘2023 World Economic Outlook,’ which was released yesterday, at its ongoing yearly Meetings in Marrakech, Morocco, IMF blamed unstable crude oil production for Nigeria’s downgrade.
Specifically, the Outlook figure forecasts Nigeria’s economic growth to move downward from 3.3 per cent in 2022 to 2.9 per cent in 2023 while projecting a slight growth to 3.1 per cent next year 2024.
The Bretton Woods institution hinged its forecasts on the adverse effects of high inflation on consumption. The 2023 forecast has been revised downward by 0.3 per cent points, which reflects weaker oil and gas production, partially due to maintenance work.
In the same vein, sub-Saharan Africa growth was put at 3.3 per cent in 2023 before accelerating to 4.0 per cent in 2024.There have been downward revisions of 0.2 and 0.1 per cent for 2023 and 2024, respectively.
The report noted that this growth trajectory remains below the historical average of 4.8 per cent. The decline in projection is attributed to worsening weather shocks, the global economic slowdown, and domestic supply challenges, notably within the electricity sector.
On the global stage, the growth rate is expected to decrease from 3.5 per cent in 2022 to 3.0 per cent in 2023 and further to 2.9 per cent in 2024 on a yearly average basis.
Conversely, emerging markets and developing economies are projected to experience a relatively modest decline in growth, going from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024.
“Collaborative efforts across various domains are essential, and it’s crucial to avoid further fragmentation in the global economic landscape as it could lead to costly delays. A pressing concern is the imperative to rebuild confidence in multilateral frameworks.
“This is vital to reinvigorate a system based on established rules that facilitate international cooperation, promote worldwide prosperity, and effectively govern potentially disruptive emerging technologies, including artificial intelligence.
At the core of these necessary reforms, a key focus should be on bolstering certainty in trade policies. A clear, stable trade policy environment is paramount to provide businesses, investors, and nations with a predictable framework that encourages economic growth and fosters mutually beneficial international trade relationships,” the report noted.
The report stressed that multilateral cooperation is vital for achieving progress in dealing with the interlocking challenges holding back global recovery.
Economic Counsellor, Pierre-Olivier Gourinchas, who wrote the foreword of the report, said: “All countries should aim to limit geo-economic fragmentation that prevents joint progress toward common goals and instead work toward restoring trust in rules-based multilateral frameworks that enhance transparency and policy certainty and help foster shared global prosperity. A robust global financial safety net with a well-resourced IMF at its centre is essential.”
Specifically commenting on Nigeria, Division Chief, Research Department, IMF, Daniel Leigh, said the downgrade is partly because of the demonetization, the high inflation, the shocks to agriculture and hydrocarbon output.
His words: “I would also add that President Tinubu has moved quickly with important reforms, including ending the fuel subsidies and unifying the official exchange rate. We welcome these initial bold reforms because we see them as paving the way toward stronger and inclusive growth.”