The International Monetary Fund (IMF) has recently raised Nigeria’s economic growth forecast to 3.2 percent for 2023 due to improved securities combating crude oil heists.
According to the Washington-based lender, IMF noted the small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector.
“In sub-Saharan Africa, growth is projected to remain moderate at 3.8 percent in 2023 amid prolonged fallout from the COVID-19 pandemic, although with a modest upward revision since October, before picking up to 4.1 percent in 2024,” IMF said in its World Economic Outlook Update (January 2023) report.
It added, “The small upward revision for 2023 (0.1 percentage point) reflects Nigeria’s rising growth in 2023 due to measures to address insecurity issues in the oil sector. In South Africa, by contrast, after a COVID-19 reopening rebound in 2022, projected growth more than halves in 2023, to 1.2 percent, reflecting weaker external demand, power shortages, and structural constraints.”
IMF said the global economy will grow 2.9 percent this year, which represents a 0.2 percentage point improvement from its previous forecast in October. However, that number would still mean a fall from an expansion of 3.4 percent in 2022.
RateCaptain analyst has identified a number of issues that will have a negative impact on Nigeria’s economic growth in 2023, which include rising food and energy costs, tightening international financial conditions, an increase in the cost of servicing domestic debt, and the potential for policy reversals in nations holding elections in 2023.
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