• Sunday, July 21, 2024
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Nigeria’s economic growth to slow 2.8% in 2023 – World Bank

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The World Bank forecasts the Nigerian economy to grow by 2.8 percent in 2023, down from 3.3 percent in 2022 and further recover to 3 percent in 2024 and 2025.

In its Africa Pulse report April 2023 edition released last week, the World Bank said the Nigerian economic growth translates into growth per capita of 0.2 percent in 2023 and 0.4 percent in 2024 and 2025, which is insufficient to reduce extreme poverty in the country.

“Growth will continue to be driven by services, trade, construction, manufacturing, and agriculture. Oil production is projected to remain subdued in 2023, because of inefficiencies and insecurity, and recover slightly in 2024 and 2025,” the multilateral institution said.

On the production side, the World Bank said growth in 2023 will be supported by industry with growth of 5.6 percent with the mega-refinery project.

In Nigeria, oil production picked up in late 2022, thanks to improved security that has so far prevented further oil theft, the World Bank said, adding that however, production remains below the OPEC+ quota.

The World Bank said Nigeria’s 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.

“Nigeria, the largest African oil producer, is not expected to reach a current account surplus in 2022. The country’s higher crude oil export revenues are more than offset by higher imports of refined petroleum products, lower remittances, and lower capital inflows,” the World Bank said in the report.

The World Bank said Nigeria’s projected current account deficit will remain at an average of 0.3 percent of GDP in 2023 till 2025 as a result ofdeclining prices and stagnant oil production.

The multilateral institution also noted that Nigeria, already the most populous country on the continent, will surpass the United States to be the third most populous country in the world.

Read also: Global economic recovery still elusive, say IMF, World Bank as spring meetings begin

“Mini-grid solutions can be efficient where governments are slow to expand the grid,” the World Bank said while citing Nigeria as an example. “In Nigeria, although the grid would be the most cost-effective solution for 80 percent of the population that has yet to access electricity, this would require adding 10 million people to the grid annually over 2022 till 2030.”

The World Bank says Nigeria has connected a maximum of 4.3 million people to the grid in a single year, “if 4.5 million people were connected to the grid per year between 2022 and 2030, then 60 percent of the people would have to access electricity through mini-grid systems.”

The World Bank said these solutions are also a better fit for purpose given that 95 percent of Nigerians without electricity access live in rural areas, where it may be difficult to achieve the necessary scale to deliver high-quality electricity access.