By Adedapo Adesanya
Nigeria’s economy has been projected to grow this year by the International Monetary Fund (IMF) despite cutting its global growth forecasts because of the war in Ukraine.
In its latest World Economic Outlook (WEO) titled War Sets Back the Global Recovery which was released on the sidelines of the ongoing IMF/World Bank hybrid spring meetings in Washington DC, the global lender said Africa’s largest economy will rise by 3.4 per cent this year.
The IMF produces the outlook in April and October, with updates in January and July. Six months ago, it was expecting the easing of pandemic pressures to result in Nigeria’s 2022 economic growth reaching 2.7 per cent.
But the fund has reviewed upward the country’s 2023 growth prediction, from 2.7 per cent to 3.1 per cent.
The multilateral institution noted that the non-oil sector played a pivotal role in increasing Nigeria’s growth prospect, noting that globally, only 86 per cent of countries saw a downward revision of their growth projection.
It indicated that Nigeria was amongst 14 per cent of countries that had been estimated to record growth.
Other parts of the report noted, “The increase in oil prices has, however, lifted growth prospects for the region’s oil exporters, such as Nigeria. Overall, growth in sub-Saharan Africa is projected at 3.8 per cent in 2022.
“In sub-Saharan Africa, food prices are also the most important channel of transmission, although in slightly different ways. Wheat is a less important part of the diet, but food, in general, is a larger share of consumption.
“Higher food prices will hurt consumers’ purchasing power, particularly among low-income households and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weighs on the outlook.”
This will happen even as “Global economic prospects have worsened significantly,”
It warned that Russia’s invasion could lead to the fragmentation of the world economy into rival blocs.
As a result, the multilateral lender reduced its growth estimate for 2022 from 4.4 per cent to 3.6 per cent.
The IMF said a further two percentage points could be shaved off global growth next year in the event the war in Ukraine led to even higher energy prices, entrenched inflation and big losses on financial markets.
