The International Monetary Fund (IMF) has revised Nigeria’s economic growth downward by 0.3 percent. The ‘2023 World Economic Outlook’ report, released during the annual meetings in Marrakech, Morocco, attributes this downgrade to unstable crude oil production in Nigeria.
To be more specific, the outlook now projects Nigeria’s economic growth to drop from 3.3 percent in 2022 to 2.9 percent in 2023. There is a slight rebound expected in 2024, with growth projected at 3.1 percent. The IMF based these forecasts on the negative impact of high inflation on consumption. The 2023 projection has been lowered by 0.3 percent, mainly due to weaker oil and gas production, partially because of maintenance work.
In the broader context of sub-Saharan Africa, growth is anticipated at 3.3 percent in 2023, with an acceleration to 4.0 percent in 2024. However, both years have seen slight downgrades of 0.2 and 0.1 percent, respectively, compared to earlier predictions. This trajectory falls below the historical average of 4.8 percent, and the decline is attributed to factors like adverse weather shocks, a global economic slowdown, and domestic supply challenges, particularly within the electricity sector.
Globally, the growth rate is projected to decline from 3.5 percent in 2022 to 3.0 percent in 2023 and further to 2.9 percent in 2024. Meanwhile, emerging markets and developing economies are expected to experience a relatively modest decline in growth, moving from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024.
The report emphasizes the need for collaborative efforts across various areas and urges against further fragmentation in the global economic landscape, as it can lead to costly delays. Rebuilding confidence in multilateral frameworks is seen as crucial for a system based on established rules, which promote international cooperation, worldwide prosperity, and effective governance of emerging technologies like artificial intelligence.
The report highlights the importance of bolstering certainty in trade policies as a key focus of necessary reforms. A stable trade policy environment is essential to provide businesses, investors, and nations with a predictable framework that supports economic growth and fosters mutually beneficial international trade relationships.
Multilateral cooperation is deemed vital to address the interconnected challenges hindering global recovery. The report suggests that all countries should aim to limit geoeconomic fragmentation and restore trust in rules-based multilateral frameworks to enhance transparency, policy certainty, and shared global prosperity. It also emphasizes the need for a robust global financial safety net with a well-resourced IMF at its core.
Regarding Nigeria, Daniel Leigh, Division Chief of the Research Department at the IMF, attributes the economic downgrade to factors like demonetization, high inflation, shocks to agriculture and hydrocarbon output. He also acknowledges important reforms initiated by President Tinubu, including ending fuel subsidies and unifying the official exchange rate, as steps toward stronger and inclusive growth.