Nigeria’s Growth Outlook Dimmed as IMF Cuts Economic Forecast Amid Oil Woes

The International Monetary Fund (IMF) has downgraded Nigeria’s economic growth forecast by 0.3 percentage points to 2.9% in 2023.

This revision, disclosed in the IMF’s latest World Economic Outlook titled ‘Navigating Global Divergences,’ was attributed to weaker oil and gas production.

Back in July, the IMF had projected a more optimistic 3.2% growth for Nigeria in 2023. However, the lingering security concerns in the oil sector have dampened these expectations.

According to the report, “Growth in Nigeria is projected to decline from 3.3% in 2022 to 2.9% in 2023 and 3.1% in 2024, with negative effects of high inflation on consumption taking hold. The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

This downgrade comes on the heels of Nigeria’s second-quarter GDP growth at 2.51% as reported by the National Bureau of Statistics.

The IMF’s outlook for sub-Saharan Africa also reflects challenges, with growth expected to dip to 3.3% in 2023 due to weather shocks, global economic slowdown, and domestic supply issues.

While a modest recovery to 4.0% is projected for 2024, it still falls short of the region’s historical average.

Globally, economic growth is set to decelerate, with advanced economies slowing to 1.5% in 2023. Emerging market and developing economies are anticipated to experience a marginal decline from 4.1% in 2022 to 4.0% in both 2023 and 2024.

Despite these challenges, the IMF’s report offers a glimmer of hope, forecasting a gradual decline in global inflation from 8.7% in 2022 to 5.8% in 2024.