In a damning projection, the World Bank has identified poor policies by the Federal Government as creating trade barriers that may worsen the nation’s economic growth this year.
In its Africa Pulse Report of April 2023, edition titled: “Leveraging Resource Wealth During The Low Carbon Transition,” the World Bank said the country’s economy is set to grow by 2.8 per cent in 2023, representing a significant drop from 3.3 per cent recorded in 2022.
However, the nation’s economic growth is expected to accelerate slightly to an average annual rate of three per cent between 2024 and 2025. The bank said this will translate into growth per capita of 0.2 per cent in 2023 and 0.4 per cent in 2024 and 2025. Nevertheless this is a far cry from what is necessary to reduce extreme poverty in the country. The World Bank also stated that growth would continue to be driven by agriculture, trade, among others.
More importantly on the production side, the report added that growth in 2023 would be supported by industry (with a growth of 5.6 per cent) with the mega-refinery project.
In his reaction to the development, David Malpass, President of the World Bank, urged Nigerian government to remove trade barriers including the multiple exchange rates, which it said are hampering the growth of the nation’s economy.
Speaking further at the Spring Meetings of the International Monetary Fund(IMF) and World Bank in Washington DC, Malpass said there was a need for Nigeria to ease trade restrictions and diversify its economy to achieve shared prosperity and sustainable growth.
Malpass in addition noted that though Nigeria’s economy is expected to grow in World Bank’s estimation by 2.8 per cent in 2023, he stressed on the need to focus on improving electricity, access to clean water, and more investment in agriculture, which would help trigger faster growth.
“For Nigeria, the growth was 3.3 per cent in 2022 and 2.8 per cent in 2023 within our forecast, and our high priority for the World Bank is shared prosperity in a sustainable way. And so, as we think about Nigeria, there are many changes that are needed in order to allow that process to proceed
“Nigeria has a big chunk of its GDP is oil and it means that a lot of people in Nigeria are facing poverty, and that needs to be a direct focus. And they also face insecurity across the northern and western regions that are very challenging. And so, the World Bank is working hard within Nigeria but also working to try to have an economic system that can be more productive, and that means Nigeria has trade protection that blocks market development.”
He added further: “They have a dual exchange rate system that is very expensive for the people of Nigeria to maintain. They have high inflation and not enough diversification of the economy to really make sufficient progress.”
