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Fuel shortage, inflation will restrain Nigeria’s economic growth- World bank

On Jun 27, 2022

The World Bank, in its June 2022 edition of Global Economic Prospects report said that fuel shortage and rising inflation will likely restrain economic growth in Nigeria.

The financial institution had projected that Nigeria’s economy would grow by 3.4 per cent in 2022 but decline to 3.2 per cent in 2023 and 2024.

For the first quarter of 2022, the National Bureau of Statistics reported a 3.11 per cent growth, which is still less than the World Bank’s growth projection for Nigeria.

The lender said the growth in Nigeria’s economy would be driven by elevated oil prices, recovery in agriculture and manufacturing, and structural reforms (for example, the Petroleum Industry Act of 2021).

However, it noted that there would be persistent production challenges in the oil sector, which are expected to weigh on growth.

The World Bank also said, “The recovery in non-oil sectors is envisioned to continue, although shortages of fuel and higher food prices would restrain growth.”

The bank also stressed that recurring fuel shortages and power blackouts would weigh heavily on growth.

“Four in ten Nigerians live below the poverty line, with many more at risk of falling into poverty and becoming food insecure. Increases in food prices would further erode domestic demand,” the report read in parts.

The bank further warned that high and persistent inflation was weighing on consumer purchasing power, especially of poor and vulnerable households.

Punch