The World Bank has cut Nigeria’s 2022 growth forecast to 3.1% from a previous forecast of 3.8%.
In its latest Nigeria Development Update (NDU), launched in Abuja, the world Bank says five million Nigerians have been pushed into poverty as a result of inflation in 2022.
They also said that the nation had to make hard choices or face a worse economic downturn in the months and years ahead.
The World Bank said that the revision in growth projection was due to slow economic growth in the third quarter, due to a weak performance in critical areas of the economy, especially the naira.
The bank also forecast growth to slow 2.9% in 2023, adding that Nigeria’s economy needs to grow faster to reduce poverty.
It noted that despite favorable global oil prices, an absence of proactive economic management is not delivering desired outcomes and, even if a crisis is avoided in the near-term, long-standing policy and institutional challenges are persisting and severely affecting the economy negatively
This hinders the prospects of the vast majority of the country’s people, at least 80 million of whom live in extreme poverty, it said, noting that whether to continue down this path, or to instead chart a new course and rise to its tremendous potential, is Nigeria’s choice.
The World Bank said that Nigeria’s economic growth has slowed on the back of declining oil output and moderating non-oil activity, adding that real gross domestic product (GDP) rose by 3.1 percent year-on-year in the first three quarters of 2022, little more than the annual population growth of 2.6 percent.
Meanwhile, it said Nigeria’s growth performance, and its fiscal and external buffers, have decoupled from high oil prices, and macroeconomic vulnerabilities have increased.
In October, the International Monetary Fund (IMF) had predicted a slower growth for the Nigerian economy in 2022, changing its forecast from 3.2 per cent in July to 3.0 per cent.