The World Bank has warned that Nigeria’s economic growth is troubling as it is not enough to support those living in extreme poverty.
According to the World Bank, the country needs to do more, as its economic growth forecast of 2.8% is too slow to help, noting that high inflation, foreign exchange shortages, and currency redesign are all challenges that must be addressed.
In the Global Development Prospect report for June 2023, the world bank highlighted these concerns. Sub Saharan Africa’s economic growth forecast has also been downgraded to 3.2% for 2023, from the 3.4% projected in the April World Economic Outlook. Global economic growth is set to slow down to 2.1% in 2023, with risks from financial uncertainty.
The World Bank said that the global economy is set to slow down to 2.1% this year, from 3.1%, due to continued monetary policy tightening to handle high inflation. Growth in Nigeria, South Africa, and Angola fell to 2.8% in 2022 due to challenges like lower energy prices and stagnant oil production. This trend has continued, and growth in Nigeria is expected to remain slightly above the population growth rate. This is not enough to make a significant change in mitigating extreme poverty.
The rebound in Nigeria’s non-oil sector cooling because of persistently high inflation is also causing challenges. Foreign exchange shortages and shortages of banknotes caused by currency redesign are contributing factors.
On the other hand, growth in Sub-Saharan Africa may decline further to 3.2% in 2023 before picking up to 3.9% in 2024. The recovery in South Africa is projected to be very slow because of widespread power outages that are having a significant impact on the economy and contributing to inflation.
More broadly than just the countries mentioned, the cost of living is higher, hampering private consumption, and tighter policies are holding back investment in many parts of the world. Consequently, worsened domestic vulnerabilities, tight global financial conditions, and weak global growth are expected to keep recoveries subdued, the report explains.
The World Bank, in its report draws attention to the need for Nigeria and other countries to do more for their economies, as current growth rates are too low to adequately support people struggling with poverty.