The World Bank has reaffirmed its 3.3% economic growth forecast for Nigeria in 2024, indicating a mildly buoyant economy despite recent macroeconomic adjustments. However, the World Bank has revised its 2025 forecast for Nigeria, reducing the expected growth from 3.7% to 3.5%.
Sub-Saharan Africa Growth Projections
In a similar vein, the World Bank has downgraded its forecast for Sub-Saharan Africa's economic growth in 2024 to 3.0%, down from the 3.8% projected in January. The report highlights that growth in the region weakened to 3.0% in 2023, with the largest economies—Nigeria, South Africa, and Angola—showing particularly weak performance.
Economic Activity and Challenges
The report notes, "Growth in
Sub-Saharan Africa (SSA) weakened to 3.0 percent in 2023. Growth in the
region’s largest three economies—Nigeria, South Africa, Angola—remained weak.
In early 2024, private sector activity picked up, buoyed by a strengthening
global economy."
Despite this, many economies in the region continue to face challenges, including weak government balance sheets caused by low revenue collection and high debt-service costs. Additionally, adverse effects of currency depreciations have compounded these issues. In Nigeria, economic growth slowed to 2.9% in 2023, yet the early part of 2024 showed signs of mild buoyancy.
Future Growth Projections
Looking ahead, growth in SSA is expected to
increase from 3.0% in 2023 to 3.5% in 2024 and around 4% annually in 2025-26.
This projection is based on the assumption that fading inflationary pressures
will allow for interest rate cuts, which in turn will support private
consumption and investment.
For the region's largest three economies, growth is projected to accelerate from 1.8% in 2023 to 2.4% in 2024, with an average growth rate of 2.6% in 2025-26. However, this remains significantly below the region's average growth rate. Non-resource-rich economies are expected to maintain growth above their historical average rates, while resource-rich economies are predicted to recover from their slow growth in 2023, largely due to declining metal prices.
Conclusion
The World Bank's reaffirmation of Nigeria's economic growth forecast for 2024 underscores the resilience of the country's economy amidst macroeconomic adjustments. However, the downgraded forecasts for 2025 and for Sub-Saharan Africa highlight the ongoing challenges and the need for strategic economic planning to foster sustained growth in the region.
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