The International Monetary Fund estimates that measures taken to address insecurity in the oil sector will cause Nigeria’s economy to expand by 3.2% in 2023, up from 3.0% in 2022.
In its World Economic Outlook Update (January 2023) report, the IMF made this clear. It stated that due to the prolonged effects of the COVID-19 pandemic, growth in sub-Saharan Africa will slow to 3.8% in 2023.
The economy of South Africa will shrink from 2.6% in 2022 to 1.2% in 2023.
“In sub-Saharan Africa, growth is projected to remain moderate at 3.8% in 2023 amid prolonged fallout from the COVID-19 pandemic, although with a modest upward revision since October, before picking up to 4.1% in 2024,” the article stated.
“Nigeria’s rising growth in 2023 as a result of measures to address insecurity issues in the oil sector is reflected in the modest upward revision for 2023 (0.1 percentage point). In contrast, South Africa’s projected growth more than doubles to 1.2% in 2023 after a COVID-19 reopening rebound in 2022 due to weaker external demand, power shortages, and structural constraints.
The lender with headquarters in Washington stated that global economic growth would slow in 2023 before rebounding in 2024. This is as activity is impacted by Russia’s war in Ukraine and the global fight against inflation.
It is anticipated that growth will slow to 2.9% in 2023 from 3.4% in 2022 before rebounding to 3.1% in 2024.
The money lender says that its January forecast is much brighter than its October forecast and could point to a turning point with growth reaching its lowest point and inflation falling.
According to the statement, “Economic growth proved surprisingly resilient in the third quarter of the previous year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe.”
Even though core inflation, which excludes more volatile energy and food prices, has not yet reached its peak in many nations, inflation also showed improvement, with overall measures now decreasing in most countries.
“Also, China’s abrupt reopening paves the way for a rapid uptick in activity elsewhere. Additionally, as inflationary pressures have begun to ease, global financial conditions have improved. Emerging and developing nations received some modest relief as a result of this and the decline in the value of the US dollar from its peak in November.
The United Nations recently predicted that Nigeria’s economic growth would reach 3% in 2023 thanks to a robust commodities trade and dynamic consumer goods and services markets.
The World Bank predicted that Nigeria’s economy would expand by 2.9% in 2023 in its own prediction.
Crude oil production in Nigeria plummeted in 2022 as a result of pipeline vandals and oil thieves’ actions. In September 2022, production fell to a low of 0.937 million barrels per day, but in December 2022, it rose to 1.235 million barrels per day.