The World Bank has said Rwanda will outgrow Nigeria, South Africa and all other African countries in 2022 despite the projected slow pace of growth when compared to 2021.
In its latest economic report titled “Stagflation Risk Rises Amid Sharp Slowdown in Growth”, the world’s leading multilateral financial institution said Rwanda’s economy is expected to grow at a 6.8% rate, the highest for any African nation in 2022 while in 2023 and 2024 it will expand at 7.2% and 7.4%, respectively.
In 2021, the economy grew at 10.9% to exceed its 9.5% pre-pandemic growth rate recorded in 2019. Also, the second-largest growth rate achieved in Africa in 2021. Botswana was the biggest at 12.1%.
However, Africa’s largest economy Nigeria was estimated to grow at 3.4% in 2022, largely due to rising oil prices. Global uncertainty amid Russia-Ukraine, Nigeria’s 2023 General Elections and emerging economies are expected to weigh on the economy in 2023 and 2024, containing the nation’s growth rate at 3.2% in the two following years.
Growth in South Africa, the second-largest economy in Sub-Saharan Africa, is projected to remain largely subdued at 2.1% in 2021. In 2023 and 2024, World Bank predicted that South Africa would grow at 1.5% and 1.8%, respectively.
Sub-Saharan Africa (SSA) region will grow at a 3.7% rate in 2022, down from 4.2% in 2021. The bank said the decline in the region will be caused by domestic price pressures partly induced by supply disruptions owing to the war in Ukraine, are reducing food affordability and real incomes, especially in low-income countries (LICs).
“Growth in SSA is expected at 3.7 percent in 2022 and 3.8 percent in 2023 – on par with January projections. Yet, excluding the three largest economies, growth was downgraded by 0.4 percentage point both in 2022 and 2023. Although, elevated commodity prices would underpin recoveries in extractive sectors, in many countries rising inflation would erode real incomes, depress demand, and deepen poverty,” World Bank stated.
“Growth in low-income countries (LICs) was revised down by almost a full percentage point this year as food price inflation and food shortages are expected to take a particularly severe toll on vulnerable populations, further worsening food insecurity in those countries.”
Nigeria’s GDP Grows by 3.46% in Q4 2023, Driven by Services
Nigeria’s Gross Domestic Product (GDP) grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, according to data released by the National Bureau of Statistics (NBS).
The GDP expansion though slightly lower than the 3.52% recorded in the same period of 2022, reflects a positive trajectory for the Nigerian economy amid ongoing challenges.
The growth rate surpassed the 2.54% recorded in the preceding quarter, indicating a rebound in economic activity.
The services sector emerged as the key driver of growth expanding by 3.98% and contributing 56.55% to the overall GDP.
This sector’s resilience underscores its pivotal role in Nigeria’s economic landscape, encompassing diverse industries such as telecommunications, finance, and real estate.
Also, the agriculture sector experienced growth, expanding by 2.10% compared to the same period in 2022.
Meanwhile, the industry sector recorded a notable improvement, growing by 3.86%, a stark contrast to the -0.94% contraction observed in the fourth quarter of 2022.
On an annual basis, Nigeria’s GDP expanded by 2.74% in 2023 compared to 3.10% in the previous year, reflecting sustained but moderated growth.
The positive trajectory in GDP growth reflects resilience in the face of various economic challenges.
However, sustaining and accelerating growth will require continued efforts to address structural bottlenecks, foster investment, and promote inclusive economic policies across sectors.
Nigeria’s Oil Sector Growth
During the fourth quarter of 2023, Nigeria’s oil sector posted a real growth rate of 12.11% year-on-year, signifying a significant improvement from previous periods.
This was driven by the surge in average daily oil production to 1.55 million barrels per day (mbpd), a positive shift in the sector’s performance.
Despite challenges such as global market fluctuations and production constraints, the oil sector contributed 4.70% to the nation’s total real GDP in Q4 2023.
Nigeria’s Non-Oil Sector
Nigeria’s non-oil sector sustained growth momentum, posting a 3.07% real growth rate in Q4 2023.
This growth was primarily attributed to key industries including finance, telecommunications, agriculture, manufacturing, and construction.
Accounting for 95.30% of the nation’s GDP in the same quarter, the non-oil sector continues to drive economic diversification efforts and reduce dependence on oil revenues.
Despite facing challenges, such as infrastructure deficits and regulatory bottlenecks, the sector’s resilience underscores its pivotal role in fostering sustainable economic development and inclusive growth agendas.
Senate Rejects Ministry of Power’s Proposed Electricity Tariff Hikes
The Nigerian Senate has firmly opposed the Ministry of Power’s proposed electricity tariff hikes, emphasizing the need to alleviate the burden on citizens amidst prevailing economic hardships.
The rejection comes as a response to the Ministry’s consideration of increasing electricity tariffs and removing subsidies in the face of escalating economic challenges across the nation.
During a recent plenary session, Senator Aminu Abbas moved a motion urging the Senate to retain electricity subsidies to mitigate the impact of rising living costs on Nigerians.
The motion garnered unanimous support, with senators expressing concerns over the implications of tariff hikes on an already financially strained populace.
The Senate’s resolution also directed the Committee on Power to conduct a comprehensive investigation into the N2 trillion required for electricity subsidy payments, outstanding debts within the sector, and the state of metering nationwide.
This decision reflects the Senate’s commitment to ensuring transparency and accountability in the power sector’s financial management.
The rejection underscores the Senate’s stance against policies that could exacerbate the financial burdens faced by Nigerian citizens.
The move aligns with the Senate’s broader efforts to prioritize the welfare of the populace and advocate for measures that promote economic stability and affordability.
Nigerian Oil Transporters End Two-Day Operation Suspension After Government Intervention
After a two-day suspension of operations by the Nigerian Association of Road Transport Owners (NARTO), oil transporters have resumed operations following government intervention.
The suspension had caused fuel queues in many states and the Federal Capital Territory, raising concerns among motorists.
The resolution came after talks mediated by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, in Abuja.
Representatives from NARTO, government officials, and stakeholders from the downstream oil sector were present at the meeting.
The agreement reached includes an adjustment in the freight rate for petroleum transporters and a commitment to address other concerns raised by NARTO members.
The decision to resume operations aims to alleviate the challenges faced by Nigerians in accessing petroleum products.
Yusuf Othman, the President of NARTO, confirmed the end of the suspension, urging members to return to work.
The association had initially suspended operations due to the high operational costs, particularly the escalating price of diesel needed to power their trucks for product transportation across the nation.
With operations now back on track, it is hoped that the resumption will help stabilize fuel distribution and prevent further scarcity, ensuring smoother access to petroleum products for consumers across Nigeria.
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