World Bank Predicts Nigeria’s Economic Growth to Decline in 2023

The World Bank recent report released in Washington on Tuesday tagged Africa’s Pulse has shown that Nigeria’s economic growth will slow from 3.3 percent to 3.2 percent next year, blaming the development on inflationary pressures.

The statement in part read, “The Nigerian economy is projected to slow in 2023, down to 3.2 percent (from 3.3 percent) and persist at this level the following year. Growth will be supported mainly by the rebound in private consumption prompted mostly by accommodative monetary policy as inflationary pressures subside.

“Private consumption expenditure is forecast to decrease this year and grow next year. This performance will likely continue in 2024. On the production side, growth in 2023 will be supported by industry (with growth of 5.1 percent) with the mega-refinery project”.

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Additionally, The report noted that the South African economy will weaken further because of structural constraints.

“Growth will be down to 1.4 percent in 2023, from 1.9 percent, and will rebound to 1.8 percent in 2024. This weak performance is insufficient for the country to address the socioeconomic problems of high unemployment and rising inequality. Private consumption expenditure growth will moderate from the rebound in 2021.

Speaking on recovery from pandemic shock, “While the recovery from the pandemic shock is incomplete, higher inflation, which reduces consumers’ disposable income, lingering effects of aggressive monetary policy, the deteriorated labor market, and weak confidence will weigh on growth in private consumption.

”It is set to decline from growth of 2.6 percent (2022) to 2.2 percent (2023) and further down to 2.0 percent (2024). After rebounding to growth of 4.2 percent in 2022, from a low base, investment growth will increase next year to 4.9 percent. Infrastructure plans, including in the energy sector, augur well for this prospect.

The World Bank report further stated that “Although private investment has improved, public investment continues to disappoint. By contrast, fiscal consolidation is set to reduce government spending next year (-1.9 percent), with a negligible recovery in 2024. On the supply side, the agriculture sector will support growth in 2023, with growth of 2.5 percent, up from 0.9 percent”.