Nigeria, in 2023 experienced a record level economic distress, as it battled with a slew of economic challenges, from its currency devaluation to its fuel hike. With such a low turning point, the only other direction seems to be up, which is what the United Nations has predicted. The international organization noted that Nigeria’s economy might experience some recovery, depending on how its economic issues are addressed.
United Nations predicts Nigeria’s economic growth to rise from 3.0% in 2023 to 3.1% in 2024.Proactive measures in climate change and domestic oil refining contribute to potential economic boosts.While challenges like inflation, high living costs, and an unfriendly business environment pose threats.
According to the United Nation’s World Economic Prospect report for 2024, Nigeria’s economic growth is set to extend from 3.0 in 2023, to 3.1.
While not having the biggest leap, the country stands among those listed to improve upon its current situation. The report notes that some of Africa’s largest economies, including, Nigeria, Kenya, Egypt, and South Africa experienced a significant economic slowdown in 2023.
Of these countries, only South Africa and Nigeria are expected to grow their real GDP percentages in 2024
For Nigeria, however, this potential growth is heavily dependent on a few factors.
In the report, the UN notes that Nigeria’s proactive approach to climate change, and in-house oil refining could boost its economy in 2024.
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“Policy reforms enacted by the Government of Nigeria in 2023, especially in the hydrocarbon sector, have contributed to a moderate improvement in the country’s growth prospects for 2024, with GDP growth forecast at 3.1 percent,” the report reads.
“Efforts to increase in-country oil refining capacity would likely reduce domestic fuel costs in 2024 and beyond,” the report adds.
However, a few factors threaten the growth of the economy, including inflation levels, high cost of living, and an unfriendly business environment.
“Ballooning public debt, persistent inflation, and a rising cost of living, together with a weak business environment, will pose a downward risk to growth prospects,” the report says.
The UN relayed that in 2023, African economies experienced inflationary pressures, with rates above the recent norm. The exchange rate pass-through from significant currency depreciations increased local import costs and fueled inflationary pressures.
“Moreover, high fuel prices resulted in higher transport costs, which were passed on to consumers in the form of higher local prices for essential items such as food. Food inflation remained elevated (above 30 percent) for some of the larger economies, including Nigeria, Egypt, and Ghana,” the report states.