The International Monetary Fund (IMF) has lowered its forecast for Nigeria’s economic growth in 2024 to 3.1%, as detailed in the July 2024 World Economic Outlook report released on Tuesday.
This revised forecast is 0.2 percentage points below the previous prediction of 3.3%, due to weaker growth observed in the first quarter of 2024.
This adjustment follows a lower-than-expected Gross Domestic Product (GDP) growth in Q1 2024, which also prompted the IMF to reduce its forecast for Sub-Saharan Africa’s economic growth in 2024 to 3.7%, down from 3.8% in the April forecast. However, the IMF increased its 2025 growth forecast for the region to 4.1% from 4.0%.
Despite the downgrade for 2024, the IMF maintained its 3.0% growth forecast for Nigeria in 2025. According to data from Nigeria’s National Bureau of Statistics (NBS), the country’s GDP growth dropped to 2.98% in Q1 2024 from 3.46% in Q4 2023.
The IMF noted that the downward revision for Sub-Saharan Africa is primarily due to Nigeria’s lower-than-expected economic performance in the first quarter of 2024. For the global economy, the IMF maintained its growth forecasts of 3.2% for 2024 and 3.3% for 2025, highlighting persistent challenges such as services price inflation and increased trade tensions, which complicate monetary policy normalization.
In Nigeria, inflation has surged to a new high, reaching 34.19% in June 2024, up from 33.95% in May 2024. The NBS reported that this 0.24 percentage point increase marks a significant year-on-year rise from the 22.79% recorded in June 2023. The month-on-month headline inflation rate in June 2024 was 2.31%, higher than the 2.14% recorded in May 2024.
Food inflation also saw an increase, with a month-on-month rate of 2.55% in June 2024, compared to 2.28% in May 2024. This rise was driven by higher prices of items such as groundnut oil, palm oil, yams, cassava, and fish.
In response to escalating food prices, the Nigerian government has implemented several measures, including suspending duties, tariffs, and taxes on the importation of maize, rice, wheat, and cowpeas for 150 days. Additionally, the government has approved the procurement of 2,000 tractors and 1,200 trailers and established a committee to address the ongoing food crisis. Experts attribute the challenges in food production to factors such as insecurity and lack of equipment.
