The International Monetary Fund (IMF) has predicted an increase in the growth of Nigeria’s economy, which is expected to rise from 3.0% in 2022 to 3.2% in 2023 due to steps taken to tackle insecurity in the oil industry.
The IMF made this announcement in its latest World Economic Outlook Update (January 2023) report. The report also mentioned that economic growth in sub-Saharan Africa will continue to be moderate, standing at 3.8% in 2023, which is a slight upward revision from October, and is due to the ongoing impact of the COVID-19 pandemic.
On the other hand, South Africa’s economy is projected to decrease from 2.6% in 2022 to 1.2% in 2023. The report predicts a pick-up in sub-Saharan Africa’s growth to 4.1% in 2024.
“The small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector. In South Africa, by contrast, after a COVID-19 reopening rebound in 2022, projected growth more than halves in 2023, to 1.2 percent, reflecting weaker external demand, power shortages, and structural constraints.”
The Washington-based lender explained that growth in the global economy will slow down in 2023 before bouncing back in 2024. This is as the global fight against inflation and Russia’s war in Ukraine weigh on activity.
Growth is forecasted to slow from 3.4 per cent in 2022 to 2.9 per cent in 2023, then rebound to 3.1 per cent in 2024.
According to the money lender, its January forecast is a lot less gloomy than its October forecast and could hint at a turning point, with growth bottoming out and inflation declining.
It said, “Economic growth proved surprisingly resilient in the third quarter of last year, with strong labour markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe.
Inflation, too, showed improvement, with overall measures now decreasing in most countries—even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries.
“Elsewhere, China’s sudden re-opening paves the way for a rapid rebound in activity. And global financial conditions have improved as inflation pressures started to abate. This, and a weakening of the US dollar from its November high, provided some modest relief to emerging and developing countries.”
Recently, the United Nations projected that a robust commodities trade and dynamic consumer goods and services markets would push Nigeria’s economic growth to three percent in 2023. In its own prediction for 2023, the World Bank stated that the Nigerian economy would grow at 2.9 per cent in 2023.
In 2022, crude oil production in Nigeria nosedived because of the activities of pipeline vandals and oil thieves. Production crashed to a low of 0.937mbpd in September 2022 but rebounded to 1.235 million barrels per day in December 2022.
