….Estimates GDP To Grow By 3.7%
The World Bank in its just published ‘Global Economic Prospects For January 2024’ has projected that Nigeria’s per capita income will return to its pre-pandemic level by 2025.
The Bretton Woods institution hinged its latest forecasts on current reforms initiatives of the Nigerian government which, it also noted, would require some modifications in order to achieve the projected performance targets of the economy.
According to the development finance institution, looking forward, Nigeria’s economic growth is projected at 3.3% for 2024 and 3.7% for 2025, representing 0.3 and 0.6-% points higher than the bank’s previous estimates made in June last year.
It reported that the improvement would largely be due to the gradual impact of macro-fiscal reforms initiated by the government.
The report reflected that the key reforms included removing the gasoline subsidy and unifying the exchange rate, which, despite causing short-term challenges, are deemed necessary for long-term economic stability and growth.
The World Bank further predicted that growth in the coming years was expected to be driven by sectors like agriculture, construction, services, and trade even as it added that inflation would ease gradually as the effects of last year’s exchange rate reforms and the removal of fuel subsidies fade away.
The report reads, inter alia: “Growth in Nigeria is projected at 3.3 percent this year and 3.7 percent in 2025—up 0.3 and 0.6 percentage points, respectively, since June—as macro-fiscal reforms gradually bear fruits. The baseline forecast implies that per capita income will reach its pre-pandemic level only in 2025.
“Growth is expected to be driven mainly by agriculture, construction, services, and trade. Inflation should gradually ease as the effects of last year’s exchange rate reforms and removal of fuel subsidies fade. These structural reforms are expected to boost fiscal revenue over the forecast period”, the bank added.
Analysts believe that as welcoming as World Bank’s report is optimistic about Nigeria’s economic growth and per capita income returning to pre-pandemic levels by 2025, improved performance of the economic is contingent on the successful implementation and continuation of the current reform momentum.
Available data showed that the Sub-Saharan African (SSA) region, particularly Nigeria, experienced a slowdown in economic growth to an estimated 2.9% in 2023, primarily due to country-specific challenges such as higher input prices for businesses in Nigeria.
The region’s three largest economies – Nigeria, South Africa, and Angola – recorded slower growth rate of an average of 1.8% in 2023.
The SSA region, of which Nigeria is the largest economy, experienced a deceleration in growth to an estimated 2.9% in 2023, lower than the earlier projection due to a combination of factors, including services growth weakening due to a disruptive currency demonetization policy of the government.
