The World Bank has reduced its growth prediction for Nigeria to 3.1% in 2022 from 3.8%.
The bank warned of a worsening economic downturn in the months and years ahead in its most recent Nigeria Development Update (NDU), unveiled in Abuja.
The World Bank explained the downward change in growth prediction by lacklustre performance in key economic areas during the third quarter.
The bank also predicts growth to slow to 2.9% in 2023, and it notes that a stronger rate of growth is necessary for Nigeria’s economy to bring down poverty levels.
It pointed out that “business as usual” economic management is not producing the expected results, especially with the recent rise in oil prices. Even if a crisis is avoided in the immediate future, long-standing policy and institutional issues will endure and significantly impede economic growth.
At least 80 million Nigerians live in terrible poverty due to this, the report stated, adding that the country has a choice to continue down this route or to chart a new direction and realise its enormous potential.
The World Bank reports that Nigeria’s economic development has slowed due to falling oil output and moderate non-oil activity. Real GDP expanded by 3.1% in the first three quarters of 2022, just above the annual population growth of 2.6%.
Moreover, it claimed that high oil prices no longer directly influence Nigeria’s growth performance or its ability to maintain fiscal and external buffers, leading to a rise in macroeconomic vulnerabilities.
The International Monetary Fund (IMF) revised its growth prediction for the Nigerian economy in 2022 from 3.2% in July to 3.0% in October.
It was reported on Thursday by the country’s statistics office that annual inflation accelerated for the tenth month in a row in November, rising to 21.47% from October’s rate of 21.09%.
“Nigeria has a choice to implement critical macroeconomic and structural reforms that can reduce crisis vulnerabilities and increase growth. Doing so will lift per-capita incomes, sustainably reduce poverty and deliver better life outcomes for many Nigerians”, according to the World Bank Country Director for Nigeria, Shubham Chaudhuri.
“Urgent business-unusual choices are needed to avoid a scenario in which up to 80 million working-age Nigerians do not have a full-time job by 2030 and up to 23 million more Nigerians could be living in extreme poverty.”