UN Forecast 3 Per Cent Economic Growth For Nigeria

By Clement Alphonsus

The United Nations has forecast the Nigerian economy growth to three per cent in 2023 because of a robust commodities trade and dynamic consumer goods and services markets.

It disclosed this in its ‘The World Economic Situation and Prospects 2023’ report.

It said, “High inflation and power supply issues are impacting growth in Nigeria, but the economy will benefit from robust commodities trade and dynamic consumer goods and services markets, bringing growth to three per cent in 2023.”

The UN projects that aggregate economic growth will weaken to 3.8 per cent in 2023 from 4.1 per cent in 2022 in Africa due to subdued investment and deteriorating export volumes.

It further said, “To combat inflation and exchange rate pressure, about two-thirds of African countries increased domestic policy interest rates in 2022. Most countries will likely further increase rates in 2023 in parallel with the projected monetary stance of the Federal Reserve in the United States and the European Central Bank.”

According to the New York-headquartered agency, fiscal positions across Africa have deteriorated as governments sought to protect lives and livelihoods during the pandemic with average public debt rising to over 60 per cent of GDP and likely to remain as such in 2023.

It further revealed that African countries will struggle with principal repayment of about $11bn on Eurobonds by 2024 because of weaker currencies.

“Eurobond issuance has become harder for African governments, and yields in secondary markets have increased substantially, pointing to rising borrowing costs in the future.”

Earlier in January, the World Bank revealed that the Nigerian economy would grow at 2.9 per cent in its Global Economic Prospects report.

Recently, the Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed that the country was not planning to explore the bonds market in 2023 because of an unfavourable market.

She said, “In 2023, we are not in the bond market. If we are able to get back to the rates of early 2021, then we can consider going back to the bond market. But we are consistently monitoring the bond market, we are monitoring the performance of our bonds, and when it gets to that comfortable level, we will explore it.”