GlobalData Forecasts 2.7% Growth for Nigeria’s Economy in 2023

By Adedapo Adesanya

GlobalData, an analytics company, has revealed that Nigeria’s real GDP growth should grow by 2.7 per cent in 2023.

This is a slowdown in economic growth compared to 3 per cent in 2022, its report titled Macroeconomic Outlook Report: Nigeria revealed.

The report showed that the continued decline in oil production, insecurity ahead of the 2023 general elections, and high inflationary pressure remain the major areas of concern for Nigeria, adding that the broadening inflationary pressure had triggered a cost-of-living crisis.

“Inflation rate is projected to further rise to 19.2 per cent in 2023 from 19.1 per cent in 2022. According to the National Bureau of Statistics, Multidimensional Poverty Index Survey (2022), as of 17 November 2022, 133 million people, equivalent to 63 per cent of the nation’s population, were experiencing multidimensional poverty in the country,” it stated.

According to GlobalData, agriculture, industry and services sectors, the three sectors are forecast to grow by 12.2 per cent, 14 per cent, and 12.2 per cent in 2023, compared to 13 per cent, 14.9 per cent, and 12.9 per cent.

This is in comparison to 23.6 per cent, 32.2 per cent and 44.2 per cent, respectively, that the sectors contributed to the gross values added (GVA) in 2022.

In October 2022, the country allocated a budget of N20.5 trillion ($51.5 billion) for the 2023 fiscal year, of which more than 60 per cent will be used to finance debt repayments. The report said this would curtail the expenditure on other developmental sectors.

GlobalData estimates the exchange rate to depreciate to N420.60/$ in 2023 from N415.30/$ in 2022, adding that Nigeria’s foreign exchange (forex) remained depressed amid the dwindling crude oil production and lower export revenue.

Speaking on this, Mr Puja Tiwari, Economic Research Analyst at GlobalData, comments: “Nigeria’s oil output rose to 1.4 billion barrels per day (bpd) in December 2022 from below one bpd in August 2022, according to Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

“However, it is significantly below what it was last decade ago (above two million bpd). Oil theft and prolonged repair work at Forcados, a key oil terminal which is expected to continue till September 2023, will result in Nigeria’s underproduction of crude oil in 2023.

“Meanwhile, the violent attacks on the election commission offices raise questions on the security in the country ahead of elections.”

“Introducing measures to reduce poverty as well as monetary measures to curb the mounting prices continue to be the need of the hour for the Nigerian economy. Moreover, the government also needs to work towards policies to control rising gross debt, depreciating currency, and increasing unemployment to reactivate the economy,” he said.

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