IMF Still Retains Nigeria’s Growth Prediction At 3.2%, 3% For 2023, 2024

The International Monetary Fund (IMF) remains committed to Nigeria's growth prediction for 2023 at 3.2% and 3% for 2024, the same percentages it predicted in April 2023.

The forecasts were made by the Washington-based organization in its most recent World Economic Outlook (WEO), which was issued yesterday.

The paper, titled 'Near-Term Resilience Persistent Challenges,' also forecasted that Sub-Saharan Africa (SSA) will witness a drop in growth, anticipated at 3.5% in 2023, followed by an increase to 4.1% in 2024.

Furthermore, it predicted that Nigeria's expansion plans for 2023 and 2024 would decline in accordance with its April predictions, stating its reasons were due to safety in the oil industry.

The Statement Reads,

“In sub-Saharan Africa, growth is projected to decline to 3.5 per cent in 2023 before picking up to 4.1 per cent in 2024. Growth in Nigeria in 2023 and 2024 is projected to gradually decline, in line with April projections, reflecting security issues in the oil sector.

“In South Africa, growth is expected to decline to 0.3 per cent in 2023, with the decline reflecting power shortages, although the forecast has been revised upward by 0.2 percentage point since the April 2023 WEO, on account of resilience in services activity in the first quarter.”

During the meeting yesterday, the IMF's Chief Economist and Director Research Department, Pierre-Olivier Gourinchas, responded to the effects of the changing climate in Sub-Saharan Africa as well as the outlook for growth for SSA, saying: "For the whole region, we have growth that is slowing a bit from 2022 to 2023 from 3.9 per cent to 3.5 per cent. That’s a very mild downward revision for 2023 about 0.1 percentage points.

“So, this is a gross number that is kind of on the low side. I was talking earlier about the fact that this is not an environment that has very strong robust growth. And this is certainly one of the regions where we see that it’s very different from emerging Asia, for instance.”

On climate change, he stated, “It’s certainly the case that we’re seeing more extreme climate events. And some of these can have strong macroeconomic consequences. We've seen and talked about the drought in Argentina, we can think about the floods in Pakistan, and we can think about the impact of temperatures rising on agricultural yields in general and agricultural production.

“So, this is certainly something that is very important, especially for countries that have very little fiscal space, very small buffers with which they can address some of that volatility in food prices. And that’s causing in many of these countries situations of food insecurity that were particularly acute last year.

“They are a little bit less acute now because food prices have been coming down, but that remains an important risk going forward. And climate change is certainly something that is aggravating that phenomenon.”

It also said that global inflation would decline from 8.7% in 2022 to 6.8% this year, showing a 0.2% point decrease, and 5.2% in 2024.

The IMF said that the global economy is gradually recovering from the epidemic and Russia's invasion of Ukraine.

According to the IMF, the slowdown is focused on advanced countries, where growth is expected to decline from 2.7% in 2022 to 1.5% this year and stay sluggish at 1.4% next year.