According to the United Nations’ World Economic Prospect report for 2024, Nigeria is expected to see a slight increase in economic growth, rising from 3.0% in 2023 to 3.1%. The report highlights the challenges faced by some of Africa’s largest economies in 2023, including Nigeria, Kenya, Egypt, and South Africa, with only South Africa and Nigeria projected to grow their real GDP percentages in 2024.
The UN report emphasizes that Nigeria’s potential growth is contingent on several factors. It recognizes the country’s proactive stance on climate change and efforts in in-house oil refining as potential contributors to economic improvement in 2024.
The report states, “Policy reforms enacted by the Government of Nigeria in 2023, especially in the hydrocarbon sector, have contributed to a moderate improvement in the country’s growth prospects for 2024, with GDP growth forecast at 3.1 percent.” Additionally, the report suggests that increasing in-country oil refining capacity could reduce domestic fuel costs in 2024 and beyond.
However, the growth outlook is not without challenges. The report identifies inflation levels, the high cost of living, and an unfriendly business environment as potential threats to Nigeria’s economic growth. It notes concerns such as ballooning public debt, persistent inflation, and a rising cost of living, coupled with a weak business environment, which may pose a downward risk to growth prospects.
The UN report also highlights the impact of inflationary pressures on African economies in 2023, with rates surpassing recent norms. Currency depreciations led to increased local import costs, fueling inflation. Moreover, high fuel prices resulted in elevated transport costs, contributing to higher local prices for essential items, including food, with food inflation remaining above 30 percent for larger economies like Nigeria, Egypt, and Ghana.
