The World Bank yesterday projected a 2.5% economic growth for Nigeria this year, a little above the 2.4% growth forecast in 2021, according to its latest Global Economic Prospects report.
The bank attributed this to higher oil prices and accelerated growth in telecommunication and financial services.
The report said: “In Nigeria, growth is projected to strengthen somewhat to 2.5% in 2022 and 2.82.5% in 2023.
“The oil sector should benefit from higher oil prices, a gradual easing of the Organization of the Petroleum Exporting Countries (OPEC) production cuts, and domestic regulatory reforms.
“Activity in service sectors is expected to firm as well, particularly in telecommunications and financial services. However, the reversal of pandemic-induced income and employment losses is expected to be slow; this, along with high food prices, restrains a faster recovery in domestic demand.
“Activity in the non-oil economy will remain curbed by high levels of violence and social unrest as well as the threat of fresh COVID-19 flare-ups with remaining mobility restrictions being lifted guardedly because of low vaccination rates — just about 2% of the population had been fully vaccinated by the end of 2021.”
However, the report said new threats from COVID-19 variants and a rise in inflation, debt, and income inequality could endanger the recovery in emerging and developing economies.
It noted that the rapid spread of the Omicron variant suggested the pandemic will likely continue disrupting economic activities in the near term.
Specifically, it said per capita income is expected to be lower in 2022 than a decade ago in countries such as Angola, Nigeria, and South Africa.
Rising inequality and security challenges are particularly harmful to developing countries. Putting more countries on a favourable growth path requires concerted international action and a comprehensive set of national policy responses.
The report said further: “After barely increasing last year, per capita incomes are projected to recover only at a subdued pace, rising 1.1% a year in 2022-23, leaving them almost 2% below 2019 levels.
“In South Africa and Nigeria, per capita incomes are projected to remain more than 3% below pre-pandemic levels in 2023.”
Also, global growth is expected to decelerate markedly from 5.5% in 2021 to 4.1% in 2022, then 3.2% in 2023, even as there is anticipated notable deceleration in the world’s two biggest economies – the US and China, which would reduce exports from emerging and developing economies.
To this end, World Bank President, David Malpass, said the world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory.
He said: “Rising inequality and security challenges are particularly harmful to developing countries.
“Putting more countries on a favourable growth path requires concerted international action and a comprehensive set of national policy responses.”
“At a time when governments in many developing economies lack the policy space to support activity if needed, new Covid-19 outbreaks, persistent supply-chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swathes of the world could increase the risk of a hard landing.”