The International Monetary Fund has lowered Nigeria’s 2022 economic growth projection to 3.2 per cent. This is 0.2 percentage points lower than the 3.4 percent projected in its July 2022 report.
The Washington-based institution disclosed this on Tuesday in its World Economic Outlook for October 2022 titled, “Countering the Cost-of-Living Crisis.” The report also downgraded the economic growth projection for sub-Saharan Africa from 3.8 per cent to 3.6 per cent.
According to the IMF, this downgrade was due to tighter financial and monetary conditions. The report read in part, “This weaker outlook reflects lower trading partner growth, tighter financial and monetary conditions, and a negative shift in the commodity terms of trade.
” Overall, the financial institution said global growth was projected to slow from an estimated 6.1 per cent in 2021 to 3.6 per cent in 2022 and 2023. Speaking in a separate event titled, ‘Climate Change and Food Insecurity in Sub-saharan Africa,’ an analyst at the African Department IMF, Mai Farid, warned that the recent incidents of flooding in some states in Nigeria would worsen food insecurity and lead to further increase in food inflation.
The report also downgraded the economic growth projection for sub-Saharan Africa from 3.8 per cent to 3.6 per cent in October 2022, citing tighter financial and monetary conditions.
“In sub-Saharan Africa, the growth outlook is slightly weaker than predicted in July, with a decline from 4.7 percent in 2021 to 3.6 per cent and 3.7 per cent in 2022 and 2023, respectively — downward revisions of 0.2 percentage points and 0.3 percentage points, respectively,” the report said.
“This weaker outlook reflects lower trading partner growth, tighter financial and monetary conditions, and a negative shift in the commodity terms of trade.”
The Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said of the many conspicuous macroeconomic issues plaguing the Nigerian economy, the depreciation of the naira in the forex market has become the focus of all economic agents (government, investors, business owners, and consumers).
“The main issue for the apex bank is the lack of forex. And with Brent dipping below $85pb, the Federal Government’s revenue woes are bound to get worse and the CBN’s hope of achieving price and exchange rate stability before the 2023 elections may be far-fetched,” he said.
The Fund said that energy and food crises, coupled with extreme summer temperatures, starkly remind it of what an uncontrolled climate transition would look like.
Much action is needed to implement climate policies that will ward off catastrophic climate change, he said.
Unlike sub-Saharan Africa, the report projected that growth in the Middle East and Central Asia would increase to 5.0 per cent.
