According to the International Monetary Fund, measures taken to address insecurity in the oil sector will cause Nigeria’s economy to grow from 3.0 percent in 2022 to 3.2 percent in 2023.
This information was provided by the IMF in its World Economic Outlook Update report (January 2023) According to the report, growth in sub-Saharan Africa will slow to 3.8% in 2023 due to the long-lasting effects of the COVID-19 pandemic.
The economy of South Africa will contract from 2.6% in 2022 to 1.2% in 2023.
“In sub-Saharan Africa, growth is projected to remain modest at 3.8 percent in 2023 amid prolonged COVID-19 pandemic fallout, although with a modest upward revision since October, before picking up to 4.1 percent in 2024,” the report stated.
“The small (0.1 percentage point) upward revision for 2023 reflects Nigeria’s rising growth in 2023 as a result of steps taken to address insecurity issues in the oil sector. The projected growth in South Africa, in contrast, more than cuts in half to 1.2 percent in 2023 following a COVID-19 reopening rebound in 2022, reflecting weaker external demand, power shortages, and structural constraints.
According to the Washington-based lender, global economic growth will slow down in 2023 before picking up again in 2024. The global battle against inflation and Russia’s war in Ukraine are weighing on activity at the time.
Forecasts predict that growth will drop from 3.4% in 2022 to 2.9% in 2023 before increasing to 3.1% in 2024.
The money lender believes that its January forecast is significantly less pessimistic than its October forecast and may indicate a turning point with growth bottoming out and inflation declining.
In the third quarter of last year, the economy “proved surprisingly resilient, with strong labor markets, robust household consumption and business investment, and better than expected adaptation to the energy crisis in Europe.
While core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries, it too showed improvement, with overall measures now declining in the majority of them.
“China’s abrupt re-opening elsewhere paves the way for a swift recovery in activity. Additionally, as inflation pressures began to ease, the state of the world’s finances improved. These two factors, along with the US dollar’s decline from its peak in November, gave emerging and developing nations some small solace.
According to a recent United Nations forecast, Nigeria’s economy will grow by 3% in 2023 thanks to a strong commodities trade and vibrant markets for consumer goods and services.
The World Bank predicted that the Nigerian economy would expand by 2.9% in 2023 in its own projection.
Nigeria’s crude oil production plummeted in 2022 as a result of oil theft and pipeline vandalism. In September 2022, production reached a record low of 0.937 million barrels per day before increasing to 1.235 million barrels per day in December 2022.