IMF cuts Nigeria’s growth projection due to weak oil and gas output

The International Monetary Fund (IMF) has lowered its growth forecast for Nigeria by 0.3 percentage points to 2.9 percent for 2023, citing weaker than expected oil and gas production as a major factor. The IMF released its new World Economic Outlook (WEO) for October on Tuesday, with the theme ‘Navigating Global Divergences’.

According to the WEO, Nigeria’s growth is projected to decline from 3.3 percent in 2022 to 2.9 percent in 2023 and 3.1 percent in 2024, with high inflation eroding consumer spending power. The IMF said that the downward revision for 2023 reflects “weaker oil and gas production than expected, partially as a result of maintenance work”.

Nigeria, Africa’s largest economy and oil producer, has been struggling with low crude prices, security challenges, and regulatory uncertainties in the energy sector. The country’s GDP grew by 2.51 percent in the second quarter of 2023, according to the National Bureau of Statistics (NBS).

The IMF also noted that growth in sub-Saharan Africa is expected to decline to 3.3 percent in 2023 due to worsening weather shocks, the global slowdown, and domestic supply issues. However, the region’s growth is expected to pick up to 4.0 percent in 2024, which is still below the historical average of 4.8 percent.

The IMF warned that the global economic recovery is losing momentum, with growth projected to slow from 3.5 percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical average of 3.8 percent. The IMF attributed the slowdown to uneven vaccination progress, rising inflation pressures, and policy tightening in some advanced economies.