The UN made this known in its World Economic Situation and
Prospects report for 2024 projects on Monday.
The Nigeria’s inflation rate stood at 28.2 per cent, with a
debt profile of about N87.38tn by the second quarter of 2023 from N49.85tn in
first quarter, which amounts to about 75.35 per cent increase, according to the
National Bureau of Statistics.
The UN also estimated an increase in Nigeria’s growth rate, from 2.9 per cent in
2023 to 3.1 per cent in 2024.
The WESP is a report produced by the United Nations
Department of Economic and Social Affairs, in partnership with the United
Nations Conference on Trade and Development, and the five United Nations
Regional Commissions.
According to the report, Nigeria’s policy reforms enacted in
2023, especially in the hydrocarbon sector, contributed to a moderate
improvement in the country’s growth prospects for 2024, with the 3.1 per cent
Gross Domestic Product growth forecast.
“Policy reforms enacted by the government of Nigeria in
2023, especially in the hydrocarbon sector, have contributed to a moderate
improvement in the country’s growth prospects for 2024, with GDP growth
forecast at 3.1 per cent.
However, ballooning public debt, persistent inflation and a
rising cost of living, together with a weak business environment, will pose a
downward risk to growth prospects,” the report stated.
The document also noted that efforts to boost local oil
refining capacity would likely reduce domestic fuel costs in 2024 and beyond.
The UN report stated global trade remained low in 2023, with
Africa representing part of the trend and virtually no year-on-year growth in
merchandise trade volume in Africa in 2023.
The report predicted an improvement in Africa’s GDP growth
in 2024, increasing to 3.5 per cent on average, while externalities are
projected to remain unfavourable for the African economies due to a weak global
economic outlook and limited external financing opportunities.
“However, a recovery in domestic demand is projected for
those countries that experienced economic shocks stemming from currency
depreciations, electricity shortages or armed conflict,” it added.
It further stated that while developed countries channel
investments into sustainable sectors, developing countries struggle with
capital flight and reduced foreign direct investment.
According to the document, the international trade as a
growth driver was losing steam, with global trade growth weakening to 0.6 per
cent in 2023, and projected to recover to 2.4 per cent in 2024.
“Developing countries face challenges such as high external
debt levels and rising interest rates, making access to international capital
markets difficult. Decline in official development assistance and foreign
direct investment for low-income countries contribute to debt sustainability
challenges,” the document stated.
According to the report, tight financing conditions in
international capital markets – deriving from the monetary policy stances of
the United States Federal Reserve and the European Central Bank– limit external
financing and refinancing opportunities for African economies.
“Consequently, African currencies – with the exception of
the institutionally pegged CFA Franc – faced a depreciation pressures due to
weak export earnings and limited external financing inflows.
“While these deteriorating external conditions limited the
scope for economic expansion, factor such as armed conflicts, political
instabilities, extreme climate events, and infrastructure bottlenecks also
depressed domestic demand growth.
“GDP growth in African economies is forecast to register
moderate improvement in 2024, in increasing to 3.5 per cent on average,” the
report pointed out.
The UN explained that efforts to promote stronger
intra-regional trade in Africa, embedded most notably in the ongoing
implementation of the African Continental Free Trade Area (AfCFTA), are yet to
bear fruit.
“The effects of climate change continue to pose significant
downward risks for the economy in Africa. Of the 68 climate vulnerable
countries that make up the Vulnerable 20 Group, 28 are African,” the report
stressed.
“The exchange rate pass-through from substantial currency
depreciations raised the domestic prices of imports and increased inflationary
pressures. Moreover, high fuel prices resulted in higher transport costs, which
were passed on to consumers in the form of higher local prices for essential
items such as food.
“Food inflation remained elevated, above 30 per cent, for
some of the larger economies, including Nigeria, Egypt and Ghana. The member
countries of the Central Bank of West African States and the Bank of Central
African States, however, managed to keep their inflation rates substantially
lower than those of other African economies,” it stated.