The UN predicts that Nigeria’s economy would rise by 3%.

According to the United Nations, the country’s economy would expand by 3% in 2023 as a result of a strong commodities trade and thriving marketplaces for consumer products and services.

It said that the country’s economic progress is being hampered by rising prices and problems with the electricity grid. It made this disclosure in its report, “The World Economic Situation and Prospects 2023.”

The Economic Commission for Western Asia, the Economic Commission for Africa, the Economic Commission for Europe, the Economic Commission for Latin America and the Caribbean, the Economic and Social Commission for Asia and the Pacific, and the Economic and Social Commission for Western Asia collaborated to produce the report with the United Nations Department of Economic and Social Affairs.

“High inflation and power supply problems are affecting Nigeria’s development,” it said. “However, the economy will gain from strong commodities trade and dynamic consumer goods and services sectors, bringing growth to 3% in 2023.”

Due to weaker investment and declining export volumes, the UN predicts that overall economic growth in Africa would decline to 3.8% in 2023 from 4.1% in 2022.

According to the report, pricing levels that dramatically increased in Africa in 2022 as a result of a worldwide uptick in inflation are expected to level out in 2023.

According to the agency, the proportion of African nations with double-digit inflation rose to 40% in 2022 as a result of supply chain disruptions and the effects of the conflict in Ukraine, which boosted the cost of basic supplies like food and oil.

“About two-thirds of African nations raised domestic policy interest rates in 2022 to counter pressure from inflation and fluctuating currency values,” it said.

In line with the anticipated monetary policies of the Federal Reserve in the United States and the European Central Bank, most nations will likely continue to raise rates in 2023.

The organization, which has its headquarters in New York, claims that while governments tried to preserve citizens’ lives and livelihoods throughout the epidemic, budgetary circumstances have become worse across Africa, with the average public debt increasing to over 60% of GDP and projected to stay there in 2023.

It also showed that due to their currencies’ weakness, African nations would have trouble repaying the principal on their Eurobonds by 2024, which would amount to around $11 billion.

“Although several significant African countries have lower average public debt levels, they will nonetheless face high and growing debt-servicing expenses,” it was said.

In 2024, when the principal repayment of around $11 billion on Eurobonds would be due, some African nations may have trouble paying and refinancing a significant amount of debt owing to rising interest rates, weaker currencies versus the dollar, and less capital inflows.

African countries are finding it more difficult to issue eurobonds, and secondary market rates have significantly climbed, signaling potential increases in borrowing costs.

The UN noted that 17 African nations will hold presidential and parliamentary elections soon, and that incumbent or new administrations may find it difficult to address growing public discontent in many of these nations as a result of deteriorating socioeconomic conditions, such as slow wage growth, rising living expenses, and worries about food security.

The World Bank forecasted the Nigerian economy will expand by 2.9% in its Global Economic Prospects report earlier in January.

Zainab Ahmed, the minister of finance, budget, and national planning, recently revealed that due to unfavorable market conditions, the nation has no plans to explore the bonds market in 2023.

“We are not in the bond market in 2023,” she said. We may think about returning to the bond market if we are able to reach the rates of early 2021. However, we continuously track the bond market and the performance of our bonds, and when it reaches that convenient level, we will investigate.

Miniechat

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