Nigeria and its peers in Sub-Saharan Africa (SSA) will suffer increased poverty, more debt, food insecurity, lower per capita income among other challenges in 2023 as global crisis, rising rates and inflation stall global economic growth, the World Bank has said.
The multilateral lender in its Global Economic Prospects report also projected a 3.6 percent growth in SSA in 2023 and 3.9 percent in 2024; a downward review from what was earlier projected which represents a formidable challenge for economic development.
In addition, growth was revised downward for almost 60 percent of countries in the region and over 70 percent of metal exporters which are expected to be affected by the further easing of global metal.
For SSA’s three largest economies (Nigeria, Angola and South Africa), the bank projected growth of 2.9 percent, 2.8 percent and 1.4 percent respectively.
It further projected the global economy to grow by 1.7 percent in 2023 and 2.7 percent in 2024, adding that the sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95 percent of advanced economies and nearly 70 percent of emerging market and developing economies.
The slowed global growth rides on the back of elevated inflation higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine.
Read also: Nigeria’s economy projected to grow 3.2% in 2023
“Growth in advanced economies is projected to slow from 2.5 percent in 2022 to 0.5 percent in 2023; excluding China, growth in emerging market and developing economies is expected to decelerate from 3.8 percent in 2022 to 2.7 percent in 2023, reflecting significantly weaker external demand compounded by high inflation, currency depreciation, tighter financing conditions, and other domestic headwinds,” the bank said.
On rising poverty level in SSA which accounts for about 60 percent of the world’s extreme poor, the bank said growth in per capita income over 2023-2024 is expected to average just 1.2 percent, a rate that could cause poverty rates to rise and by the end of 2024, per capita incomes in almost 40 percent of countries in SSA are expected to be below their pre-pandemic levels.
According to the WB, a deeper-than-anticipated slowdown of the global economy could cause sharp declines in global commodity prices dampening growth in SSA exporters of oil and industrial metals.
“SSA food systems, already stressed by elevated costs of farming inputs and weather-induced production losses, remain particularly vulnerable to further disruptions that could lead to surging food prices and increased food insecurity, High levels of violence and conflict could escalate further if living standards continue to deteriorate,” it stated.
The lender added that global financial conditions could tighten more if global inflation pressures persist longer-than-expected leading to higher borrowing costs and a higher risk of debt distress in many SSA economies.
“The crisis facing development is intensifying as the global growth outlook deteriorates; emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates.” said David Malpass, president, World Bank Group said in a statement.
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