The African Development Bank, AfDB, forecasted yesterday that Nigeria’s GDP, which measures economic growth, will rise to 3.1 percent in 2023, citing uncertainty about policy continuity following the election and rising insecurity as factors lowering the country’s growth prospects for the year.
The Bank predicts that growth will slow to 3.0 percent in 2022, down from 3.6 percent in 2021. The official GDP of Nigeria for 2022 has yet to be announced.
While the Bank’s forecast is 0.65 percentage points lower than the Federal Government’s forecast of 3.75 percent, it is 0.2 percentage points higher than the World Bank’s forecast of 2.9 percent for the country. It is also 0.1 percentage points higher than the International Monetary Fund’s (IMF) projection of 3.0 percent.
However, the AfDB forecasts that Nigeria’s GDP will recover to 3.3% in 2024.
Making these projections in its Africa’s Macroeconomic Performance And Outlook, January 2023, released yesterday, the AfDB said:
In Nigeria, the region’s largest economy, growth is estimated to have declined to 3.0 percent in 2022 from 3.6 percent in 2021, but still above the country’s population growth rate of about 2.4 percent.
Nigeria has, however, suffered from a protracted decline in oil production due to technical inefficiencies arising from ageing infrastructure and theft, limiting the gains from high international oil prices. It is also experiencing deep macroeconomic imbalances, underpinned by a costly subsidy on fuel, near 20-year high inflation, and foreign exchange shortages that fuelled rapid depreciation of the national currency, further eroding citizen’s purchasing power.
Uncertainty about policy continuity in the aftermath of the 2023 general elections, coupled with rising insecurity, has dampened investor confidence, which in turn has constrained investment, further weakening the country’s growth prospects.
Against these headwinds, real GDP growth is projected to remain tepid at 3.1 percent in 2023 before slowly picking up to 3.3 percent later.
Furthermore, the AfDB forecasts higher economic growth rates of 4.0 percent for Africa and 4.1 percent for the West African Region in 2023.
