Nigeria is projected to see a slight enchancment in its Gross Home Product (GDP) development to three.1 % in 2024 from an estimate of three.0 % in 2023 on the again of its coverage reforms, based on the United Nations (UN).
This was revealed in its newest 2024 World Financial Scenario and Prospects report. The report comes amid stark world financial inequalities and excessive geopolitical tensions.
“Coverage reforms enacted by the Authorities of Nigeria in 2023, particularly within the hydrocarbon sector, have contributed to a average enchancment within the nation’s development prospects for 2024, with GDP development forecast at 3.1 %,” the report mentioned.
It mentioned, nevertheless, that ballooning public debt, persistent inflation and a rising value of dwelling, along with a weak enterprise surroundings, will pose a downward danger to development prospects.
“Efforts to extend in-country oil refining capability would probably cut back home gasoline prices in 2024 and past. Vitality subsidy reforms in Nigeria, Angola and Gambia, in addition to tax hikes in Kenya, Ghana and South Africa, purpose to supply the Authorities with some aid from tight fiscal areas.”
The intergovernmental organisation added that financial development in Africa is estimated to have decelerated from 3.5 % in 2022 to three.3 % in 2023.
“Most international locations within the area skilled a big financial slowdown, together with main economies resembling Egypt, Nigeria, Kenya, Ghana and South Africa,” it mentioned.
Final yr was robust for Africa’s most populous nation as naira shortage, the elimination of petrol subsidy and naira devaluation elevated inflation pressures, poverty and unemployment within the nation.
The nation’s GDP rose marginally by 2.54 % (year-on-year) within the third quarter of final yr from 2.51 % in Q2 and a couple of.25 % in the identical interval of 2022, based on the Nationwide Bureau of Statistics.
Headline inflation rose to an 18-year excessive of 28.2 % in November from 27.33 % in October. In Q2, the unemployment charge rose to 4.2 % from 4.1 % in Q1.
International investments plunged to $654.7 million in Q3, the bottom in a minimum of 11 years, from $1.03 billion within the earlier quarter. The nation’s foreign money depreciated by 49.1 % to N907.1 on the finish of 2023 from N461.6 in 2022 on the official market.
“African economies confronted vital inflationary pressures in 2023, leading to an inflation charge larger than the latest common. The trade charge pass-through from substantial foreign money depreciations raised the home costs of imports and elevated inflationary pressures,” authors of the UN report mentioned.
They added that furthermore, excessive gasoline costs resulted in larger transport prices, which have been handed on to shoppers within the type of larger native costs for important objects resembling meals.
“Meals inflation remained elevated (above 30 %) for among the bigger economies, together with Nigeria, Egypt and Ghana. In 2023, the three main worldwide credit standing companies downgraded among the main economies in Africa, together with Nigeria, Ghana, Egypt, Kenya and Morocco.”
UN highlighted that the African Union is engaged on establishing an unbiased credit standing modality that can present balanced and complete danger evaluations for African international locations to decrease their borrowing prices in worldwide monetary markets.
