World Bank, KPMG Predict Similar Slow Economic Growth Rate for Nigeria in 2023 as Tinubu's Govt Gets Ready

World Bank, KPMG Predict Similar Slow Economic Growth Rate for Nigeria in 2023 as Tinubu's Govt Gets Ready

  • World Bank and KPMG have issued nearly identical forecasts of Nigeria's economic growth rate in 2023
  • According to both respected financial institutions, Nigerians should expect growth between 2.8% and 3% in the year
  • Their predictions are based on inflation, high debt to service, oil production, and political transitions to Tinubu's government

The World Bank and KPMG have predicted that Nigeria's economy will likely experience a slow growth rate in 2023.

The reports issued by the two financial institutions cited various reasons, including inflation, debt, and the transition to a new government.

President Muhammdu Buhari is expected to hand over to Bola Ahmed Tinubu on May 29, 2023.

World bank Economic prediction ahead of Tinubu govt
World Bank and KPMG predictions come less than two months before Tinubu's government. Photo credit: @worldbank @kpmg @tinubu
Source: Facebook

The World Bank, in its latest Africa report, said that Nigeria’s economy would grow by 2.8% as oil production remains subdued.

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The global institution also predicted that sluggish growth will be experienced across sub-Saharan Africa because of uncertainty in the global economy.

The World Bank further stressed that Nigeria's economy would underperform due to a weaker local currency, foreign exchange scarcity, and rising inflation.

Part of its report reads:

"Non-oil economic activity remained weak as the agriculture and industrial sectors experienced a rapid increase in the costs of energy and raw materials that were magnified by a weaker naira in the foreign exchange market
Inflation rates remain high and above targets despite the early and sizable interest rate hikes undertaken by African central banks including Nigeria's Central Bank."

The World Bank also predicted that economic growth in Sub-Saharan Africa will decrease from 3.6% in 2022 to 3.1% in 2023 due to declining commodity prices and monetary policy tightening. Inflation is expected to decrease to 7.5% in 2023 and 5.0% in 2024.

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KPMG shares identical predictions for Nigeria

For KPMG, Nigeria's Gross Domestic Product (GDP) will grow at a slow pace of 3 percent in 2023.

In its report, titled 'Global Economic Outlook - H1 2023,' highlights that the slowdown in economic activity during political transitions in Nigeria is a major contributing factor to the slow growth, BusinessDay reports.

KPMG also mentioned the challenges in the foreign exchange market, Naira Redesign Policy, inadequate government revenue, high debt, global economic slowdown, and contraction in the oil sector.

KPMG also expects inflation to remain above 20 percent in 2023 and predicts that the unemployment rate will rise further to 40.6 percent in 2023.

Each Nigerian owes China N8,430 as foreign debt rises to over $41bn

Meanwhile, in another report, the Debt Management Office (DMO) website has revealed Nigeria's foreign debt has increased to $41 billion.

For countries, DMO data shows Nigeria has $4.46bn debt to China and four other countries.

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As expected, Nigeria owes more to China than the other countries, including France and Germany.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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