Home Banking & Finance ‘Nigeria’s economic outlook is unsettled’ — World Bank

‘Nigeria’s economic outlook is unsettled’ — World Bank

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The World Bank has described Nigeria’s economic outlook as uncertain and that its domestic and foreign investment attractiveness is crashing.

The Washington-based bank also noted that the welfare condition in Nigeria continues to worsen despite the economic recovery from the recession.

This was reported in its draft report for State Action on Business Enabling Reforms, available on its website.

The report reads in part, “Although the Nigeria’s economy in 2021-2022 recovered from recession induced by the COVID-19 pandemic and lower oil prices, growing by 3.6 per cent in 2021 with an expected growth of 3.2 per cent in 2022, welfare has continued to deteriorate.

“The country’s economic outlook remains uncertain and threatened by many issues including the impact of the 2022 Russian invasion of Ukraine on the global economy, lower-than-expected oil production due to technical inefficiencies; heightened insecurity; higher uncertainty on policy direction arising from the upcoming February 2023 general elections; and worsening fiscal risks related to the PMS subsidy deductions.”

The report stressed the need to catalyse private investment in order to boost growth and create jobs, noting that this type of investment was declining in the country.

The bank said, “Besides, Nigeria’s ability to attract domestic and foreign investment is low and declining compared to its peers. Private sector investment’s contribution to growth has declined as a consequence of macroeconomic and financial policies that constrain exports and foreign investment.”

Furthermore, the World Bank stressed that foreign exchange management regimes must become more flexible and transparent, fiscal consolidation should be accelerated based on revenue, expenditures should be managed more effectively, and environmental conditions for businesses should be improved.

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