Prospect for Attaining 6% Average Growth Rate in 4 years
Highlights
- The World Bank has retained its 2023 GDP growth forecast for Nigeria at 2.80% which it says is barely above the population growth rate and accordingly too slow to address the challenges of extreme poverty in the country.
- The president, during his inauguration speech had set target to increase the GDP growth rate of the country by 6% on average in the next 4 years through budgetary reforms aimed at stimulating the real sector of the economy.
- An average GDP growth rate of between 4-4.5% at the best is more feasible in the next 4 years. Even this will require the country to get its policies right and keep consistent faith with macroeconomic reforms.
Event
The World Bank retained its 2023 GDP growth forecast for Nigeria at 2.80% from 3.3% recorded in 2022. This 2023 forecast is in line with KPMG’s revised forecast of 2.85% (from 3.0% earlier stated), following the release of Nigeria’s Q1 2023 GDP estimates last month. In its statement, the World Bank postulated that Nigeria’s growth which has averaged about 1.5% in the last decade was too slow to address the challenges of extreme poverty in Nigeria due to high inflation, the naira redesign cash crunch in Q1 2023 and low foreign exchange availability. According to the World Bank, growth in Nigeria is expected to remain barely above the population growth rate which is far slower than needed to make significant inroads into mitigating extreme poverty.
Analysis/Opinion
The role of economic growth in reducing poverty is well recognized especially if the benefit of that growth is adequately distributed. Nigeria’s growth since 2019, has been fragile, not growing fast enough to contain population growth (2.6%-3.0%) and needs to be less inequitable (with a Gini coefficient of 35.1% in 2022).
Accordingly, per capita income has contracted by over 40% since 2015.
