World Bank Affirms Nigeria’s Economic Growth Forecast, Adjusts Future Projections

The World Bank has affirmed its economic growth forecast for Nigeria at 3.3% for 2024, noting that the country’s economy showed mild buoyancy in the early part of the year despite facing macroeconomic adjustments. However, the World Bank has revised its growth forecast for Nigeria in 2025 to 3.5%, down from the previously projected 3.7% in January.

Key Highlights:

1. 2024 Economic Growth Forecast:
   • The World Bank maintains a 3.3% growth forecast for Nigeria in 2024.
2. Revised 2025 Forecast:
   • The economic growth forecast for Nigeria in 2025 has been downgraded to 3.5% from the initial 3.7%.
3. Sub-Saharan Africa (SSA) Outlook:
   • The forecast for SSA economic growth in 2024 has been revised to 3.0%, down from the 3.8% projected in January.
   • The region’s growth weakened to 3.0% in 2023, with significant economic challenges in Nigeria, South Africa, and Angola.

World Bank Report Insights:

• Regional Economic Activity: The early part of 2024 saw a pickup in private sector activity in SSA, driven by a strengthening global economy. However, many economies in the region continue to face challenges such as weak government balance sheets, low revenue collection, high debt-service costs, and currency depreciations.
• Nigeria’s Economic Performance: Growth in Nigeria slowed to 2.9% in 2023. Despite ongoing macroeconomic adjustments, the economy exhibited mild buoyancy in early 2024. The World Bank anticipates that the Nigerian economy will benefit from reduced inflationary pressures, which should allow for interest rate cuts, supporting private consumption and investment.
• Future Growth Projections:
  • SSA growth is expected to rise from 3.0% in 2023 to 3.5% in 2024, and to around 4% annually in 2025-26.
  • The largest three economies in the region (Nigeria, South Africa, Angola) are expected to see growth accelerate from 1.8% in 2023 to 2.4% in 2024, and to an average of 2.6% in 2025-26. However, this remains below the regional average growth.
• Economic Variability: Non-resource-rich economies in SSA are forecast to maintain growth above their historical average, while resource-rich economies are expected to recover from the slow growth seen in 2023, which was mainly due to declining metal prices.