UN projects Nigeria’s economy to grow by 3% in 2023

The United Nations says the Nigerian economy will grow by 3 percent in 2023.

In its report titled ‘2023 world economic situation and prospects’, the intergovernmental organisation said despite high inflation and poor power supply in the country, the economy would benefit from robust commodities trade and dynamic consumer goods and services markets.

The report was produced by the United Nations Department of Economic and Social Affairs (UN DESA), in partnership with the United Nations Conference on Trade and Development (UNCTAD) and five United Nations regional commissions.

“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 3 percent in 2023” the report reads.

The organisation said aggregate output in Africa is projected to remain subdued amid volatile and uncertain global environment compounding domestic challenges.

The UN also said favourable export prices would benefit commodity exporters in Africa but a slowdown in global demand would pose challenges.

It added that African mineral exporters — Botswana, the Democratic Republic of the Congo, Namibia, Nigeria, Sierra Leone, South Africa, the United Republic of Tanzania, Zambia and Zimbabwe– would likely receive increased investments, with Europe looking for alternative sources of critical minerals, metals, and precious stones.

“Inflation pressures are expected to ease in 2023 as monetary policy tightens across the continent. Yet, rapidly rising borrowing costs and debt-servicing burdens pose significant risks along with electoral instability and food insecurity,” the report reads.

The UN said 17 countries including Nigeria will hold presidential and parliamentary elections in 2023, and 13 others will be preparing for national elections in 2024.

It added that rising popular dissatisfaction in many of these countries, driven by worsening socioeconomic conditions, including subdued wage growth, the escalating cost of living and food security concerns, could prove challenging for incumbent or new administrations.

The organisation said, although a slow decline in political and military tensions is expected, if insecurity should persist or rise, the economic outlook for affected and surrounding countries could worsen considerably.

Earlier this month, the World Bank downgraded Nigeria’s 2023 economic growth projection to 2.9 percent from a previous projection of 3.1 percent.