Adedapo Adesanya
By Adedapo Adesanya
Nigeria’s inflation rate will drop to 24.8 per cent in 2024, and the Gross Domestic Product (GDP) is expected to expand by 3.3 per cent in the same year, the World Bank has revealed.
In its latest report released on Monday, the Bretton Wood institution said this would happen as inflation cooled in the Sub-Saharan part of Africa, where Nigeria belongs.
According to the most recent data from the National Bureau of Statistics (NBS), inflation increased by 31.7 per cent in February from 29.9 per cent recorded in January.
“Inflation is cooling in most Sub-Saharan African economies but remains high. The median inflation in the region is projected to fall from 7.1 per cent in 2023 to 5.1 per cent in 2024 and 5 per cent in 2025–26.
“The normalization of global supply chains, steady decline of commodity prices, and impacts of monetary tightening and fiscal consolidation are contributing to a lower rate of inflation in the region,” the World Bank stated.
Business Post recalls that the Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, projected that inflation should moderate to 21.4 per cent this year.
In the report released yesterday, the World Bank cut down its economic growth forecast for the country for 2025 to 2026 by 0.1 per cent to 3.6 per cent from its January projection of 3.7 per cent.
“Growth in Nigeria is projected at 3.3 per cent in 2024 and 3.6 per cent in 2025–26 as macroeconomic and fiscal reforms gradually start to yield results,” it added.
“A more stable macroeconomic environment, as the reforms’ initial shock dissipates, will lead to sustained but still slow growth of the non-oil economy.
“The oil sector is expected to stabilize with recovery in production and slightly lower prices. Structural reforms will be needed to foster higher growth.
“Average inflation will remain elevated at 24.8 per cent in 2024, although it is expected to ease gradually to 15.1 per cent by 2026 on the back of monetary policy tightening and exchange rate stabilization,” it further said.
According to the World Bank, food inflation and the weakening of domestic currencies are still major drivers of inflation across countries in the Sub-Saharan Africa region.
“By February 2024, about one-third of the Sub-Saharan African countries with monthly available food price information (14 of 40 countries) had double-digit year-on-year rates of food inflation, with the fastest increases experienced in Ethiopia, Malawi, Nigeria, Sierra Leone, and Zimbabwe.”
It also noted that the rate of poverty reduction in the region is slow and that Nigeria and the Democratic Republic of Congo account for one in three of those living in extreme poverty.
“The region also faces the triple challenges of high extreme poverty, high inequality, and low transmission of growth to poverty reduction.
“The speed of poverty reduction has decreased tremendously since 2014. The rate of reduction was 3.1 per cent between 2010 and 2014, subsequently decreasing to 1.2 per cent between 2014 and 2019,” the World Bank said.
“In contrast, the rest of the world reduced extreme poverty on average by 9.2 per cent per year within the same time horizon, suggesting that the African region is falling further behind.
“In addition, there is substantial regional heterogeneity in where the poor are with Nigeria and the Democratic Republic of Congo accounting for one in three of those living in extreme poverty,” it stated, adding that the region can accelerate growth and poverty reduction substantially by tackling inequality, specifically structural inequality.
