World Bank Forecasts 3.3% Growth For Nigeria’s Economy This Year

  • Sees Weakest Half-Decade For Global Economy In 30 Years

 

A new report by the World Bank Group, the Global Economic Prospects (GEP) fpr the month of January says Nigeria’s economy is billed to recorded growth this year and next, possibly on the back of reforms already undertaken by the government of President Bola Tinubu.

According to the report released on Tuesday, Nigeria’s economy is forecast to growth by 3.3% this year, an improvement of 0.4% from 2.9% estimated for the just ended year, from which it could gain momentum, closing at 3.7% in 2025.

The country is however not alone, as fellow West African nation- Ghana is projected to grow by 2.8% this year from 2.3% before closing next year by 4.4%; far behind Rwanda’s 7.5% this year, from 6.9% in 2023, from which it is projected to close 2025 at 7.8%. Senegal is forecast to achieve more than double its 4.1% of 2023 to 8.8% GDP growth in 2024 from where it would leap to 9.3% by the end of next year; while South Africa is expected to limp in 2023 by 0.7% from where it would rise to 1.3% and then 1.5% this year and next respectively.

The most significant growth this year in Sub-Saharan Africa is expected in Niger Republic, which is projected to soar from just 2.3% of this year’s estimate to 12.8% in 2024, from where it would drop to 7.4% in 2025.

The report also sees SSA’s economy excluding Nigeria, South Africa and Angola, an oil producing nation growing by 3.3% in 2023, and thereafter 5.0% and 5.3% in 2024 and 2025.

With the world nearing the midpoint of what was intended to be a transformative decade for development, the World Bank report said the global economy is set to rack up a sorry record by the end of 2024—the slowest half-decade of GDP growth in 30 years.

Although he report says the global economy is in a better place than it was a year ago, with the risk of a global recession receding largely on the strength of the U.S. economy, the bank warned that the mounting geopolitical tensions could create fresh near-term hazards.
Global growth is projected to slow for the third year in a row—from 2.6% last year to 2.4% in 2024, almost three-quarters of a percentage point below the average of the 2010s. Developing economies are projected to grow just 3.9%, more than one percentage point below the average of the previous decade, just as low-income countries should grow 5.5%, weaker than previously expected. By the end of 2024, people in about one out of every four developing countries and about 40% of low-income countries will still be poorer than they were on the eve of the COVID pandemic in 2019. In advanced economies, meanwhile, growth is set to slow to 1.2% this year from 1.5% in 2023.

Reacting to the report, Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President warned that “without a major course correction, the 2020s will go down as a decade of wasted opportunity. Near-term growth will remain weak, leaving many developing countries—especially the poorest—stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people.”

That, he continued, “would obstruct progress on many global priorities. Opportunities still exist to turn the tide. This report offers a clear way forward: it spells out the transformation that can be achieved if governments act now to accelerate investment and strengthen fiscal policy frameworks.”

To tackle climate change and achieve other key global development goals by 2030, the Global Economic Prospect estimates that developing countries will need to deliver about $2.4tr per year, among it tagged a formidable increase in investment.

Even than, it warned that without a comprehensive policy package, prospects for such an increase are not bright, just as per capita investment growth in developing economies between 2023 and 2024 is expected to average only 3.7%, just over half the rate of the previous two decades.

The report offers the first global analysis of what it will take to generate a sustained investment boom, drawing from the experience of 35 advanced economies and 69 developing economies over the past 70 years.

For Ayhan Kose, the bank’s Deputy Chief Economist and Director of the Prospects Group,“Investment booms have the potential to transform developing economies and help them speed up the energy transition and achieve a wide variety of development objectives.

“To spark such booms, developing economies need to implement comprehensive policy packages to improve fiscal and monetary frameworks, expand cross-border trade and financial flows, improve the investment climate, and strengthen the quality of institutions. That is hard work, but many developing economies have been able to do it before. Doing it again will help mitigate the projected slowdown in potential growth in the rest of this decade,” he stressed.

The latest Global Economic Prospects also identifies what two-thirds of developing countries—commodity exporters specifically—can do to avoid boom-and-bust cycles.

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