IMF Downgrades Nigeria’s Economic Growth

The International Monetary Fund has downgraded Nigeria’s economic growth by 0.3 percentage points to 2.9 per cent for 2023 following weaker oil and gas production.

The IMF disclosed this in its new World Economic Outlook (for October) themed, ‘Navigating Global Divergences,’ released on Tuesday.

Earlier in July, the lender projected that Nigeria’s economy would grow by 3.2 per cent in 2023. Then it predicted that growth in the country would be impacted by security issues in the oil sector.

Commenting on its new prediction for the country, the Washington-based lender said, “Growth in Nigeria is projected to decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

“The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

According to the National Bureau of Statistics, Nigeria’s GDP grew by 2.51 per cent in the second quarter of 2023.

Growth in the sub-Saharan African region is expected to decline to 3.3 per cent in 2023 due to worsening weather shocks, the global slowdown, and domestic supply issues, the IMF noted.

It, however, stated that this growth will pick up by 2024 to 4.0 per cent in 2024, which is still below the region’s historical average of 4.8 per cent.

Overall, global economic growth is projected to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024, well below the historical (2000–19) average of 3.8 per cent, the IMF declared.

It added, “Advanced economies are expected to slow from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024.”

Inflation, which has been on a global rise, is expected to fall from 8.7 per cent in 2022 to 6.9 per cent in 2023 and 5.8 per cent in 2024, the IMF highlighted.