The World Bank has said that the incoming administration in Nigeria will face weak economic growth and policy challenges this year.
In its latest Africa’s Pulse report for April 2023, published on Wednesday, the bank predicted a 2.8 per cent economic growth for Nigeria in 2023.
This new projection is lower than the 2.9 per cent earlier projected in the bank’s Global Economic Prospects report that was published in January this year.
Part of the report read, “The growth recovery in Nigeria for 2023 (2.8 per cent) is still fragile as oil production remains subdued and the new administration faces many policy challenges.”
In Africa’s Pulse report, the global bank noted that Nigeria’s economy would underperform due to weaker local currency, foreign exchange scarcity, and rising inflation.
It also noted that Nigeria was underperforming on long-term growth rates due to weakening performance, especially in the non-oil activity and weak oil production.
The report read, “In Nigeria, oil production picked up in late 2022, thanks to improved security that has so far prevented further oil theft; however, production remains below the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) quota.
“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.”
The World Bank also commented on the CBN’s cashless policy, which weighed on economic activities.
The report noted, “the demonetization efforts that started in mid-December are weighing on economic activity. The Stanbic IBTC Bank PMI contracted to 44.7 in February 2023, from 53.5 in January 2022, as business output and new orders were sharply affected by cash shortages.
