The World Bank has warned that Nigeria’s economic growth is too slow to address the challenge of extreme poverty in the country.

Meanwhile, the bank has retained its economic growth (Gross Domestic Product, GDP) forecast of 2.8% for Nigeria in 2023, citing challenges of high inflation, foreign exchange shortages, and shortages of banknotes caused by currency redesign.

The World Bank gave the warning in the Global Development Prospect report for June 2023.

Among other things, the bank downgraded its economic growth forecast for Sub Saharan Africa to 3.2% for 2023, from 3.4% projected in its April World Economic Outlook. It also projected that global economic growth will slow to 2.1% in 2023, with prospects clouded by financial risks.

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The World Bank stated: “After growing 3.1 percent last year, the global economy is set to slow substantially in 2023 to 2.1 percent, amid continued monetary policy tightening to rein in high inflation, before a tepid recovery in 2024, to 2.4 percent.

“Growth in Sub-Saharan Africa (SSA) continued to decelerate earlier this year owing to various country-specific challenges and heightened external economic headwinds.

“Growth in the three largest SSA economies – Nigeria, South Africa and Angola – slowed to 2.8 percent in 2022 and continued to weaken in the first half of this year. In Angola and Nigeria – SSA’s largest oil producers – the growth momentum has stalled amid lower energy prices and stagnant oil production.

“The post-pandemic rebound in Nigeria’s non-oil sector cooled earlier this year because of persistently high inflation, foreign exchange shortages, and shortages of banknotes caused by currency redesign.

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“Growth in SSA is expected to decline further to 3.2 percent in 2023 before picking up to 3.9 percent in 2024. The recovery in South Africa is projected to slow to 0.3 percent this year as widespread power outages weigh heavily on activity and contribute to the persistence of inflation.

“Growth in Nigeria is expected to remain barely above the population growth – far slower than needed to make significant inroads into mitigating extreme poverty.

“Outlook downgrades, however, extend beyond the major regional economies with elevated cost of living restraining private consumption and tighter policies holding back a pickup in investment in many countries.

“More broadly, worsened domestic vulnerabilities together with tight global financial conditions and weak global growth are expected to keep recoveries subdued.”