The World Bank has cut Nigeria’s 2022 growth forecast to 3.1% from a previous forecast of 3.8%.
In its latest Nigeria Development Update (NDU), launched in Abuja, the bank said that the nation had to make hard choices or face a worse economic downturn in the months and years ahead.
The World Bank said that the revision in growth projection was due to slow economic growth in the third quarter, due to a weak performance in critical areas of the economy.
The bank also forecast growth to slow 2.9% in 2023, adding that Nigeria’s economy needs to grow faster to reduce poverty.
It noted that despite favorable global oil prices, “business as usual” economic management is not delivering desired outcomes and, even if a crisis is avoided in the near-term, long-standing policy and institutional challenges are persisting and severely constraining the economy.
This hinders the prospects of the vast majority of the country’s people, at least 80 million of whom live in extreme poverty, it said, noting that whether to continue down this path, or to instead chart a new course and rise to its tremendous potential, is Nigeria’s choice.
The World Bank said that Nigeria’s economic growth has slowed on the back of declining oil output and moderating non-oil activity, adding that real gross domestic product (GDP) rose by 3.1 percent year-on-year in the first three quarters of 2022, little more than the annual population growth of 2.6 percent.
Meanwhile, it said Nigeria’s growth performance, and its fiscal and external buffers, have decoupled from high oil prices, and macroeconomic vulnerabilities have increased.
In October, the International Monetary Fund (IMF) had predicted a slower growth for the Nigerian economy in 2022, changing its forecast from 3.2 per cent in July to 3.0 per cent.
On Thursday, the nation’s statistics office announced that annual inflation climbed to 21.47% in November from October’s rate of 21.09%, accelerating for the 10th consecutive month.
“Nigeria has a choice to implement critical macroeconomic and structural reforms that can reduce crisis vulnerabilities and increase growth. Doing so will lift per-capita incomes, sustainably reduce poverty and deliver better life outcomes for many Nigerians”, said Shubham Chaudhuri, World Bank Country Director for Nigeria.
“Urgent business-unusual choices are needed to avoid a scenario in which up to 80 million working-age Nigerians do not have a full-time job by 2030 and up to 23 million more Nigerians could be living in extreme poverty.”