The World Bank reaffirmed its 3.3% economic growth prediction for Nigeria in 2024, saying the country’s economy was slightly upbeat in the first half of the year despite macroeconomic changes.
However, the World Bank lowered its prediction for Nigeria’s economic growth in 2025 to 3.5 per cent, from the 3.7 per cent forecast given in January
Similarly, the World Bank revised its prediction for Sub-Saharan economic growth in 2024 to 3.0%, down from 3.8% in January.
According to the report, growth in Sub-Saharan Africa (SSA) has slowed to 3.0 percent in 2023. Growth in the region’s three largest economies—Nigeria, South Africa, and Angola remains poor. In early 2024, private sector activity increased, aided by a growing global economy.
The region’s economies face challenges such as weak government balance sheets, low revenue collection, high debt-service costs, and currency depreciation. In Nigeria, growth slowed to 2.9% in 2023, but remained mildly buoyant in early 2024. SSA growth is expected to increase from 3.0% in 2023 to 3.5% in 2024.
Non-resource-rich economies are expected to maintain growth above their historical average rate, while resource-rich economies recover from their slow growth in 2023, which was primarily due to declining metal prices. Growth in the region’s largest three economies is expected to accelerate from 1.8 percent in 2023 to 2.4 percent in 2024 and an average of 2.6 percent in 2025-26, but this remains significantly lower than the region’s average growth.
Why this matters
Nigeria is a major player in the region’s economy, they showed some positive signs in the first half of 2024 despite facing macroeconomic changes. This initial momentum could indicate potential for stronger growth later in the year. Overall, Sub-Saharan Africa is expected to see a slight improvement in growth from 2023 to 2024, suggesting a gradual economic recovery is underway.
However, the World Bank did revise its growth forecasts for both Nigeria and Sub-Saharan Africa downward from their January predictions, this indicates that economic hurdles remain. Weak government finances, low revenue collection, high debt servicing costs, and currency depreciation continue to pose challenges for the region’s economies. Additionally, the three largest economies (Nigeria, South Africa, and Angola ) are still underperforming compared to their historical growth rates.
Despite these challenges, there are some bright spots. Economies less reliant on natural resources are projected to outperform historical averages. This suggests potential for diversification and long-term economic stability within the region.
Bottom Line
While there are signs of economic recovery in Sub-Saharan Africa, the region still faces significant challenges. Addressing structural issues and promoting sustainable growth will be crucial for the region’s long-term economic health.
