The International Monetary Fund has explained why it downgraded Nigeria’s 2024 economic growth forecast from 3.1 per cent to 2.9 per cent, citing lower-than-expected output and slow economic activity in the first half of the year.
This was disclosed in the IMF’s World Economic Outlook for October 2024.
In addition to adjusting Nigeria’s GDP forecast, the report showed that inflation in the country will remain above 32 per cent until the end of 2024, specifically projecting it at 32.5 per cent.
For emerging and developing economies, inflation is expected to decline to 25 per cent according to IMF data.
The IMF noted that Nigeria’s weak economic performance has also affected its broader GDP forecast for sub-Saharan Africa.
Regional increase is now expected to reach 4.2 per cent in 2025, following an estimated 3.6 per cent growth in 2023.
However, the 2024 forecast for the region has been reduced down by 0.2 percentage points due to Nigeria’s slow recovery.
The report states: “In sub-Saharan Africa, GDP growth is expected to increase, as the negative impacts of prior weather shocks abate and supply constraints ease.
“However, the regional forecast has been revised downward for 2024, reflecting weaker activity in Nigeria and ongoing conflict in South Sudan, where the economy contracted by 26 per cent.”
In the second quarter of 2024, Nigeria’s oil sector recorded a GDP growth rate of 3.52 per cent, reflecting a recovery from previous downturns.
The growth is not only attributed to crude oil production but increasingly to the expanding natural gas sector.
According to the National Bureau of Statistics, the oil and gas sector’s contribution to GDP has seen a remarkable improvement, with gas output playing a vital role.
Currently, Nigeria is recording an average daily oil production of 1.7 million barrels per day (mbpd), higher than the daily average production of 1.4 mbpd recorded in the same quarter of 2023. It is also 0.13mbpd higher than the first quarter of 2024 production volume of 1.57 mbpd.
Data from the NBS showed that the oil sector’s real growth was 10.15 percent (year-on-year) in the second quarter of 2024, an increase of 23.58 percentage points relative to the rate recorded in the corresponding quarter of 2023 (-13.43 percent).
