Nigeria’s 2022 real GDP (Gross Domestic Product) growth rate has been revised down by the World Bank from 3.2 percent to 3.1 percent, reflecting the country’s deteriorating economic performance over the previous six months. As presented in the organization’s most recent Nigeria Development Update (NDU), which was presented in Abuja, unless the country made some tough decisions in the coming months and years, the bank projected a further economic collapse. Concerning GDP growth, the World Bank now expects that real GDP will enhance by 3.1 percent in 2022 to 2.9 percent in 2023-24, which is down 0.3 of a percentage point from the projections made during the period of the June 2022 NDU.
Ever since the previous report, which was released in June 2022 with the title, “The Continuing Urgency of Business Unusual,” the organization claims that the economic growth of Nigeria has deteriorated since then. Even though global oil prices are favorable, ‘Business as usual’ management of the economy is not achieving the desired results, and regardless of whether a crisis is evaded in the relatively close, long-standing regulatory and institutional issues are continuing and severely restricting the economy.
High inflation and central banks’ monetary policy are economic setbacks.
It was discovered that the world economy has become less favorable, with economic activities in the majority of the world’s most influential countries getting slowed in 2022 as a consequence of high inflation, as well as central banks leaning toward recessionary monetary policies. The bank observed that the inflation rate in consumer prices have been on the rise and is now among the highest seen anywhere in the world. The increase in the consumer price index, which was already occurring rapidly, picked up speed in 2022 through October, reaching a 17-year high of 21.1% year-over-year growth.
The bank observed the absurdity that, unlike other oil-producing countries throughout the world, the Nigerian economy has still not benefited from the high prices of oil. Despite higher global oil prices, it was noted that external and budgetary constraints had increased. In the past, oil price booms have helped the Nigerian economy. However, this has yet to be the case in 2021 and 2022. Even though the average crude oil price surged by more than 150 percent between 2020 and 2022, the country’s macroeconomic performance deteriorated, and its economy declined during this time.
High production costs lead to the country’s oil fall.
Nigeria is not profiting from increased oil prices for two reasons: Firstly, Lower oil production: Since 2020, Nigeria’s crude oil production has fallen underneath the Petroleum Exporting Countries (OPEC) quota due to high costs of production, theft and insurgency, joint-venture cash-call defaults, and underinvestment. Second, rising petrol subsidy costs: The petrol subsidy (subtracted straight from oil earnings) will cost 2.5–2.7 percent of the Gross domestic product in 2022. Due to this and the prolonged drop in oil production, the government has received the lowest net oil profits in almost a decade.
Therefore, the bank cautioned that carrying on with “business as usual” measures in Nigeria would amount to a decision to limit people’s opportunities. The bank urged the Nigerian government to take swift steps to regain macroeconomic stability by, among other things, raising oil and non-oil revenues, decreasing inflation through a structured and organized mix of trade, budgetary and financial policies to reinstate situations for private growth and investment; eliminating the fuel subsidy; and implementing a solitary, market-responsive rate of exchange.
Nigeria’s economy could improve if it uses its untapped potential.
Alex Sienaert, co-author of the report who is also the World Bank Lead Economist for Nigeria remarked that past series of reform success and rapid growth, for instance, in the 2000s, suggest that Economic growth could change rapidly because Nigeria has enormous untapped economic potential. The lives of 80 million poor Nigerians, the economy of Nigeria as a whole, and the continent of Africa would be transformed if Nigeria decided to adopt changes that strengthen its macroeconomic policy settings and boost investment.
Related Link
WB: Website
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WB reduce Nigeria’s GDP projection to 3.1% – Despite the global increase in oil prices, Nigeria’s economy has not improved. – Express your point of view.
It is advisable the govt make moves and necessary steps to regain the economy stability should be encouraged such as decrease inflation,budgetary and financial policies to reinstate situations for private growth and investment; eliminating the fuel subsidy etc.
Our GDP is just reducing drastically. We have been predicted that our GDP will be lower. We need to diversify our economy. The Agriculture and other sectors need to work pari pasu to ensure the economy is standardized.
The World bank has predicted that our GDP will reduce. We haven’t really had any time we can see that our GDP rises. Our economical policies have not been up to par lately. It is so unfortunate.
The service allows Nigerians abroad with expired passport to return home easily. We is advisable the govt make moves and necessary steps to regain the economy stability
Even from a layman view Nigeria economic is in shambles. All the government can do is to implement effective measure to replenish it while pushing for more progress in the country.
consumer price inflation has been on the increase and is now among the highest levels seen anyplace in the world.
In 2022, it was found that rising inflation had a negative impact on the global economy, slowing economic activity in most of the world’s most prominent countries.
Our country stability is not balance our economy is not improving new step and idea need to be come up with to solve and improve our economy of the country we need to increase GDP
To restore macroeconomic stability, the Nigerian government must quickly implement measures to increase oil and non-oil revenues, reduce inflation through a structured and organized mix of trade, and increase foreign direct investment.
Simply put, our GDP is falling by a significant amount. It has been forecasted that our GDP will come in lower than expected. Our economy desperately needs to be diversified. To ensure that the economy is standardized, Agriculture and the other sectors need to collaborate closely with one another.
Researchers found that rising inflation hampered economic activity in most of the world’s most powerful countries in 2022, making the global economy less favorable.
The central bank made the observation that the inflation rate in consumer prices has been climbing steadily and is now among the highest rates that have been witnessed anywhere in the globe.
The bank made the ridiculous observation that, in contrast to economies in other oil-producing nations throughout the world, Nigeria’s economy has not yet profited from the current high prices of oil.
In spite of greater prices for oil on the world market, it was observed that both external and internal restraints had become more severe.
The bank urged the government of Nigeria to take immediate action to recover macroeconomic stability by, among other things, increasing oil and non-oil revenues.
The government should be urged to take the steps necessary to restore economic stability, including lowering inflation and adopting fiscal and monetary policies that provide favorable conditions for private sector investment and expansion. Reduce or get rid of gasoline subsidies
In terms of GDP expansion, the World Bank now anticipates that real GDP will increase by 3.1 percent in 2022 to 2.9 percent in 2023–24, which is a decrease of 0.3 percentage points from the predictions made during the time period of the June 2022 NDU.
It was found that the global economy has deteriorated, and that rising inflation will cause economic activity in the vast majority of the world’s most prominent countries to slow down in 2022.
It is rather unfortunate that we are in this present mess after we have cried for change in the year 2015 during the presidential election and yet it has gone from bad to worst not worse but worst. This present administration lack the ability to governan this nation. We want credible leader with wealth of experience and well schooled that can stir the ship of this country.
When this administration begin politicians were given portfolios instead of technocrats what do you expect.
A school cert holder was empowered as the president of this nation. We are the cause of our problem.
If the right person were elected into power and are ability use the right tools to gazette the future and take the right decision will not find ourselves in this mess.
It is well.
We have elected some crops of people who after creating the disaster are now disaster manager. The very predicament that the country has found herself was orchestrated by this present administration. They lack foresight and has plunge this country into financial catastrophe. I hope we will recover from it very soon.