The country’s growth is expected to slow down in 2024, according to the International Monetary Fund (IMF).
The most recent World Economic Outlook (WEO) report, made public on Tuesday, stated as much.
The analysis projects that Nigeria’s economy will continue to develop at the same rate as in 2023, with 2.9% growth in 2024.
The most recent estimate represents a 0.2% drop from the July estimate and a 0.4% drop from the April estimate.
“The revision reflects slower growth in Nigeria, amid weaker-than-expected activity in the first half of the year,” the international lender said.
In his further explanation of Nigeria’s economic difficulties, Jean-Marc Natal, deputy head of the IMF’s Research Department, identified oil and agricultural production disruptions as the main causes of the updated growth projection.
He made this statement at a press conference Tuesday at the ongoing IMF/World Bank annual meetings in Washington, D.C., to announce the World Economic Outlook.
Natal stated: “We revised growth for Nigeria 2024 by 0.2% down. Things are volatile because the reason for the revision is precisely issues in agriculture related to flooding and issues in the production of oil, related to security and maintenance that have pushed down the production of oil. So, these two elements have had an impact.”
Nonetheless, the IMF also pointed out that the growth estimate for 2025 is 3.2%, which is 0.2% higher than the estimates from this year’s July and April.
What To Note
The World Bank’s projections for 2024 and 2025 are significantly higher than the IMF’s.
According to the most recent edition of Africa’s Pulse, a World Bank report, Nigeria’s GDP is expected to grow by 3.3% in 2024 and then slightly accelerate to 3.6% in 2025–2026.
The report stated: “Economic growth in Nigeria is expected to be 3.3% in 2024 and 3.6% in 2025-26 as macroeconomic and fiscal reforms begin to yield benefits. Inflation peaked in June 2024 (34.2% year on year), fell to 33.4% in July, and then to 32.2% in August.”
However, according to IMF projections, Nigeria’s inflation rate will decrease from an average of 32.55% in 2024 to 25% in 2025.
The IMF also urged nations with high inflation, like Nigeria, to implement stricter monetary policies to stabilize their economies at the news conference.
Pierre-Olivier Gourinchas, the IMF’s head of research and economic counselor, emphasized the necessity of striking a balance between fiscal and monetary policy to address inflation and debt issues.
He stated, “In countries with strong inflation, we suggest a tight monetary policy position. Fiscal consolidation can help in some circumstances, where possible, but it is complicated by trade-offs that many countries face.”
Gourinchas also emphasized the crucial role of striking a balance between necessary spending and fiscal consolidation to spur growth.
He cautioned that attempts at economic recovery may be hampered by excessive austerity.
He stated: “You have to be careful because most countries have important needs when it comes to spending, whether it is about essential services, healthcare, or public investments. If you try to do too much too quickly, you might have an adverse impact on growth.”
“We must safeguard the type of expenditure that promotes growth,” he concluded.
Nigeria’s economy expanded by 2.98% and 3.19% in this year’s first and second quarters, respectively, despite a spike in inflation and additional currency devaluation.
