Trouble Ahead as World Bank Predicts Nigeria’s Economy Will Take Major Hit in 2023 and Beyond

Trouble Ahead as World Bank Predicts Nigeria’s Economy Will Take Major Hit in 2023 and Beyond

  • The World Bank has released its economic outlook for Nigeria for 2023 and beyond
  • The bank said the country’s economy will witness slow economic growth in 2023
  • It said the economy will grow at a slow pace of 2.7 per cent and remain stagnated until 2024

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The World Bank forecasted that Nigeria’s economy would shrink to 2.9 per cent in 2023 and remain so until 2024.

The bank’s projection is predicated on Nigeria’s weak oil showing which was detailed in the Bank’s 2023 Global Economic Prospect report.

Nigeria's Economy, World Bank, IMF
President Muhammadu Buhari Credit: Horacio Villalobos / Contributor
Source: Getty Images

Factors that may destroy Nigeria's economy in 2023

Other issues like insecurity, external factors and reduction in oil prices are expected to weaken the country’s economic performance and its most lucrative sector.

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The bank said:

“Existing production, security challenges, and moderation in oil prices are expected to hinder a recovery in oil output. Policy uncertainty sustained high inflation, and rising incidence of violence is anticipated to temper growth. The fiscal position is expected to remain weak because of high borrowing costs, lower energy prices, sluggish growth of oil production, and subdued activity in the non-oil sectors.” The Bank warned.

Also, the bank said a global economic outlook which looks consistent with economic recession has been highlighted by many experts since the second quarter of last year.

In a forecast, the bank said the world economy is projected to accelerate by 1.7 per cent in 2024.

Africa will be home to 60 per cent of the world's poorest

According to reports, in Africa, the bank said the continent will be home to 60 per cent of the world’s poorest in per capita income between 2023 to 2024.

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World Bank said:

“In Sub-Saharan Africa which accounts for about 60% of the world’s extreme poor growth in per capita income over 2023-24 is expected to average just 1.2%, a rate that could cause poverty rates to rise, not fall.”

Per the World Bank, high borrowing costs, lower energy prices and slow growth in oil production and other factors in the oil industry will weaken Nigeria’s fiscal position, according to a Punch report.

The Washington-based bank said debt sustainability and investor sentiment have worsened in many countries which led to the rise in borrowing costs and poor credit ratings in countries such as Ghana and Nigeria.

IMF Issues gloomy warning says large part of the world will be in recession in 2023 reported that 2023 is predicted to be economically turbulent for a third of the world as major economies in the world would be in recession in 2023.

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According to the head of the International Monetary Fund (IMF), Kristalina Georgieva warned that it is going to be a tough 2023 for top economies like China, the US and Europe which will all experience weakening economic activities.

The Managing Director of IMF revealed this on Sunday, January 1, 2023, on the television programme, Face the Nation.


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