The United Nations has revealed that the recent shortage of the naira crippled the Nigerian economy.
It stated that the informal sector was most affected by scarcity. It stated that the country’s finances would be impacted in 2023 as a result of the ongoing decline in oil production.
In its “Trade and Development Report Update,” the UN made this public. The United Nations Conference on Trade and Development published a report titled “Global Trends and Prospects (April 2023).”
The United Nations Conference on Trade and Development stated, “In Nigeria, a shortage of cash, triggered by the replacement of the highest denominations of the country’s currency, hampered the economy, especially the informal sector.”
“Meanwhile, the main threat to Africa’s most populous nation’s already-strained finances is the continuing decline in oil production, accompanied by large-scale oil theft.”
The organization says that the overall African economy is expected to grow by 2.5%, which is lower than last year but still not enough to reduce poverty levels on the continent. It explained that this is not due to tighter financial conditions or lower external demand.
It was noted that half of African nations experienced inflation in the double digits in early 2023, putting many African economies at risk of stagflation in that year.
UNCTAD featured, “In many examples, these new expansion spikes connect with the proceeding with deterioration of a few African monetary standards in mid 2023 – frequently keeping a misfortune in 2022 of 10-30 percent of their worth versus the dollar.
Another cause for concern across the continent is public debt, which is frequently at levels not seen since the early 2000s. Eight of the 38 African nations included in the IMF and World Bank’s Debt Sustainability Framework are currently “in debt distress” and thirteen are “at high risk of distress.”
The New York-based agency expressed concern that many African economies are approaching a maturity wall because most governments are unable to tap international capital markets to roll over maturing debts because maturities on international bonds issued in the previous decade will peak in 2024 and remain elevated for the next decade.
The organization added, “Generally speaking, gambles stay shifted to the disadvantage. In many parts of the continent, the rising cost of living in the country and the deteriorating security situation continue to be major concerns. In excess of 116 million African individuals are as of now in intense food uncertainty as per the most recent projections of WFP and FAO.”
Due to its commodities trade and consumer goods and services markets, the UN recently revealed that Nigeria’s economy will grow by 3% in 2023.