According to the World Bank, this year will bring policy issues and lackluster economic development for Nigeria’s incoming government. The bank forecast a 2.8% economic growth for Nigeria in 2023 in its most recent Africa’s Pulse report, which was released.
The World Economic Prospects report from the bank, which was released in January of this year, had previously predicted a growth rate of 2.9%, but this revised estimate is lower.
The growth rebound in Nigeria for 2023 (2.8%) was described in the report as “still fragile” since oil production was still low and the new administration was dealing with numerous policy issues.
The international bank said in its Africa’s Pulse report that Nigeria’s economy would do poorly because of a weaker local currency, a lack of foreign exchange, and rising inflation.
The report read, “In Nigeria, oil production picked up in late 2022, thanks to improved security that has so far prevented further oil theft; however, production remains below the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) quota.
“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.” The World Bank also commented on the CBN’s cashless policy, which weighed on economic activities.
The report noted, “the demonetization efforts that started in mid-December are weighing on economic activity. The Stanbic IBTC Bank PMI contracted to 44.7 in February 2023, from 53.5 in January 2022, as business output and new orders were sharply affected by cash shortages.