THE International Monetary Fund (IMF) has upgraded Nigeria’s economic growth to 3.3 per cent in 2024 from 3.0 per cent.
The Bretton Wood Financial Institution gave the upward review in its latest forecast released today, April 16.
In its January 2024 World Economic Outlook, IMF downgraded the country’s economic growth forecast to 3.0 per cent from a 3.1 per cent projected in October 2023.
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In 2023, the IMF estimated the country’s economy to grow by 2.9 per cent amid various macroeconomic headwinds.
However, in its last report, ‘World Economic Outlook, April 2024: Steady but Slow: Resilience amid Divergence,’ the IMF stated that Nigeria’s economy would grow to 3.3 per cent this year but slid back to 3.0 per cent in the coming year.
The ICIR reports that the latest forecast represents a 0.3 per cent growth in 2024. However, Nigeria’s economy is expected to slide to 3.0 per cent in 2025.
In the sub-Saharan Africa region, growth is projected to rise from an estimated 3.4 per cent in 2023 to 3.8 per cent in 2024 and 4.0 per cent in 2025 as the adverse effects of earlier weather shocks subside and supply issues gradually improve.
Global growth, estimated at 3.2 per cent in 2023, is projected to continue at the same pace in 2024 and 2025.
According to the IMF, high borrowing costs, withdrawal of fiscal support, longer-term effects from the COVID-19 pandemic, Russia’s invasion of Ukraine and the conflict in Gaza and Israel, weak growth in productivity, and increasing geoeconomic fragmentation are factors affecting the global economy and could raise interest rate expectations and reduce asset prices.
Amid high government debt in many economies, a disruptive turn to tax hikes and spending cuts could weaken activity, erode confidence, and sap support for reform and spending to reduce risks from climate change.
An IMF team recently visited the Nigerian Minister of Finance, Wale Edun, the Central Bank Governor, Olayemi Cardoso, other key government officials, representatives from subnationals, the private sector, and civil society, and flagged the country’s critical challenges.
“With about eight per cent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority,” the team urged.
The team also pointed out that the approved targeted social safety net programme, which is expected to provide cash transfers to vulnerable households, needed to be fully implemented before the government could address costly, implicit fuel and electricity subsidies in a manner that would ensure the protection of low-income households.
Despite the CBN tightening monetary policy to curb the surging inflationary pressure, a recent release by the National Bureau of Statistics showed that headline inflation rose to 33.2 per cent in March, the highest since 1996, and food inflation to 40.01 per cent.
Since this year, the CBN has raised the monetary policy rate by 600 basis points in its last two consecutive meetings, held in February and March. However, the measure has not helped to contain the rising inflation figure that the IMF anticipated.