World Bank warns, Nigeria hemmed in by slow economic growth
By Jeph Ajobaju, Chief Copy Editor
Economic growth in Nigeria is too slow to tackle extreme poverty in which at least 133 million out of its 200 million citizens are marooned, the World Bank alerted in its Global Development Prospect report for June 2023.
The World Bank retained Nigeria’s forecast 2.8 per cent Gross Domestic Product (GDP) growth rate this year, despite insecurity, energy, and other economic challenges.
It, however, downgraded its 2023 economic growth forecast for Sub-Saharan Africa (SSA) from 3.4 per cent in its April World Economic Outlook to 3.2 per cent.
The World Bank noted the post-pandemic rebound in Nigeria’s non-oil sector cooled earlier this year because of persistently high inflation, foreign exchange (forex) shortages, and scarcity of banknotes caused by naira redesign.
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Slow growth in 3 largest SSA economies
“Growth in the three largest SSA economies – Nigeria, South Africa and Angola – slowed to 2.8 per cent in 2022 and continued to weaken in the first half of this year,” the World Bank said, per Daily Post.
“In Angola and Nigeria – SSA’s largest oil producers – the growth momentum has stalled amid lower energy prices and stagnant oil production.”
Data compiled by the National Bureau of Statistics (NBS) shows more than 65 percent of Nigerians are “multidimensionally” poor.
President Bola Tinubu has, however, promised to grow the economy through various economic revitalisation initiatives.
Nigeria’s debt to World Bank grows to nearly $14b
Nigeria’s debt to the World Bank alone jumped to $13.9 billion in December 2022, an increase of $1.5 billion from 2021 – apart from the latest $800 million loan granted by the bank to cushion the effects of fuel subsidy removal.
Reliance on the World Bank by Nigeria has increased in the past three years, particularly after the Covid-19 lockdown.
Public debt, which includes external and domestic debt – but excludes Ways and Means of the Central Bank of Nigeria (CBN) – totalled N46.25 trillion ($103.1 billion) in 2022.
External debt in 2022 amounted to $46 billion owed various lenders, including the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB), and China.
Total debt owed the World Bank was $10.1 billion in 2019, which rose to $12.5 billion in 2020. Between 2019 and 2022, Nigeria’s debt to the World Bank increased by $3.8 billion.
The loans are used to shore up external reserves allowing the country to continue to stabilise naira exchange rate.
The federal government’s portion of money owed the World Bank is about $9.2 billion, states account for about $4.1 billion.
