The International Monetary Fund (IMF) has revised Nigeria’s economic growth forecast for 2024 down to 2.9 percent, citing factors such as insecurity in oil-producing regions, the impact of flooding, and lower-than-expected economic activity in the first half of the year. This adjustment, detailed in the latest World Economic Outlook.
The IMF highlighted that this revision also impacts the broader Sub-Saharan Africa growth outlook, which decreased from 3.8 per cent to 3.7 per cent.
The report was presented by IMF’s economic counselor and director of Research, Pierre-Olivier Gourinchas, during a press conference unveiling the World Economic Outlook (WEO) at the ongoing IMF/World Bank annual meetings in Washington, D.C. Earlier in April, the IMF had projected Nigeria’s growth at 3.3 percent for 2024, which was subsequently adjusted to 3.1 percent in July.
In recent weeks, devastating floods have claimed the lives of hundreds of Nigerians, destroyed homes and farmland while posing a significant threat to food supplies, particularly in the severely affected northern region. According to the National Emergency Management Agency, the floods—largely attributed to inadequate infrastructure and dam management—resulted in 185 fatalities and displaced approximately 208,000 people across 28 of Nigeria’s 36 states. Additionally, ongoing unrest in the Niger Delta region has further impacted oil production, which is Nigeria’s primary source of revenue.
The IMF stressed the need for governments to strike a delicate balance between curbing inflation and providing necessary support to vulnerable populations. Using Nigeria as an example, Gourinchas explained, “Fiscal consolidation becomes difficult when governments must also allocate resources for relief efforts, such as responding to flooding or supporting the poor and vulnerable.” Debt sustainability remains a persistent issue across the region. “Although some progress has been made in controlling debt, it is still too high, and the debt service burden remains significant,” Gourinchas added. He expressed optimism, however, that the region could make further strides toward stabilizing its economies if the right policy mix is maintained.
The report noted that global growth is expected to remain stable yet underwhelming in the year. “However, notable revisions have taken place beneath the surface since April 2024, with upgrades to the forecast for the United States offsetting downgrades to those for other advanced economies, in particular, the largest European countries. Likewise, in emerging markets and developing economies, disruptions to production and shipping of commodities—especially oil—conflicts, civil unrest, and extreme weather events have led to downward revisions to the outlook for the Middle East and Central Asia and that for sub-Saharan Africa.
“These have been compensated for by upgrades to the forecast for emerging Asia, where surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence, has bolstered growth, a trend supported by substantial public investment in China and India. Five years from now, global growth should reach 3.1 per cent—a mediocre performance compared with the pre pandemic average.”
