Nigeria’s economy set to grow 2.5% in 2022 – World Bank

Nigeria’s economy is expected to grow 2.5 percent in 2022, compared to an estimated 2.4 percent growth in 2021, the World Bank said.

The bank, in its January 2022 Global Economic Outlook report released on Tuesday, said Nigeria’s growth is expected to strengthen somewhat to 2.5% in 2022 and 2.8% in 2023.

He cited the rebound in rising oil prices as well as accelerated growth in telecommunications and financial services.

“The oil sector should benefit from the rise in oil prices, a gradual easing of the Organization of the Petroleum Exporting Countries (OPEC) production cuts and national regulatory reforms, ”he said.

“Activity in the services sectors is also expected to strengthen, particularly in telecommunications and financial services.”

However, he said the income reversal and pandemic-induced job losses are expected to be slow, which, along with high food prices, is holding back a faster recovery in domestic demand.

“New threats from COVID-19 variants and rising inflation, debt and income inequality could endanger the recovery in emerging and developing economies,” the report said.

He explained that activity in the non-oil economy will continue to be held back by high levels of violence and social unrest in parts of the country as well as the threat of further outbreaks of COVID-19.

The bank also predicted that per capita income is expected to be lower in 2022 than it was ten years ago in the countries of Angola, Nigeria and South Africa.

“The pandemic has reversed at least a decade of gains, per capita income in some countries in nearly a third of the region’s economies, including Angola, Nigeria and South Africa, per capita incomes are expected to be lower in 2022 than a decade earlier.

“After barely increasing last year, per capita incomes are only expected to recover at a moderate pace, increasing by 1.1% per year in 2022-2023, leaving them almost 2% below the levels of 2019.

“In South Africa and Nigeria, per capita incomes are expected to remain more than 3% below pre-pandemic levels in 2023,” the report said.

SLOW-DOWN

According to the report, global growth is expected to decelerate significantly, from 5.5% in 2021 to 4.1% in 2022, then 3.2% in 2023.

“As the world enters the third year of the COVID-19 crisis, economic developments have been both encouraging and disturbing, overshadowed by many risks and considerable uncertainty,” said Bank Group President Global, David Malpass, in the front of the report.

“The good news is that production in many countries rebounded in 2021 after a sharp decline in 2020.

“Advanced economies and many middle-income countries have achieved substantial immunization rates. International trade has accelerated and high commodity prices are benefiting many developing countries.

“Domestic financial crises and external debt restructurings have been less frequent than might be expected during a time of severe global shocks.

“Yet for many developing countries, progress towards recovery has been hampered by daunting challenges,” said Malpass.

He added that macroeconomic imbalances have reached unprecedented proportions.

He said government spending, deficits and debt in several advanced economies have reached record levels relative to GDP.

“Spending in developing countries has increased to support economic activity during the crisis, but many countries are now facing record levels of external and domestic debt.

“Along with these debt risks are the potential for higher interest rates, it is difficult to predict how quickly interest rates will rise as advanced economies slow the expansion of their monetary policies.

“With fiscal and monetary policy in uncharted territory, the implications for exchange rates, inflation, debt sustainability and economic growth are unlikely to be favorable to developing countries,” he said.

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