Nigeria's economy has experienced a slowdown due to macroeconomic issues such as high inflation rates, foreign exchange shortages, and problems caused by the redesign of the Naira, according to a report by the World Bank. The report shows that this dampened growth is also being experienced in Angola and South Africa, resulting in a decrease in growth to 2.8% in 2022.
Furthermore, the World Bank states that the outlook downgrades extend beyond the major economies, with the elevated cost of living restraining private consumption while tighter policies hold back investment inflow. To reduce poverty and spread prosperity, the World Bank recommends the creation of employment opportunities, which can be more difficult to achieve due to slower growth.
On a global scale, the World Bank predicts a projected deceleration in growth from 3.1% in 2022 to 2.1% in 2023. Emerging markets and developing economies are experiencing growing debt pressures as a result of higher interest rates, while fiscal weaknesses have already pushed low-income countries into debt distress.
Both Indermit Gill, Chief Economist and Senior Vice President, World Bank Group, and Ayhan Kose, Deputy Chief Economist, World Bank Group, counsel immediate action by policymakers to prevent financial contagion and reduce domestic vulnerabilities.
Overall, the report highlights the precarious state of the world economy, with trade expected to grow at less than one-third of its rate before the pandemic, and the financing needed to achieve sustainable development goals expected to exceed even the most optimistic projections of private investment.