Again, IMF downgrades Nigeria’s economic growth forecast in 2024

In April, the IMF had earlier projected Nigeria's growth to be 3.3 per cent in 2024, but lowered its forecast to 3.1 per cent in July.

The International Monetary Fund (IMF) on Tuesday downgraded Nigeria’s economic growth to 2.9 per cent in 2024.

The fund, in its Global Economic Outlook report, lowered Nigeria’s growth forecast on the basis of insecurity in oil-producing areas, the impact of floods and lower-than-expected activity in the first half of the year.

The report was presented by Pierre-Olivier Gourinchas, IMF’s Director of Research Department, and Daniel Leigh, the Division Chief.

In April, the IMF had earlier projected Nigeria’s growth to be 3.3 per cent in 2024, but lowered its forecast to 3.1 per cent in July.

Weeks of flooding killed hundreds of Nigerians earlier in the year, washing away homes and farmlands and further threatening food supplies, especially in the hard-hit northern region.

The floods were mostly attributed to poor infrastructure and dams, killing 185 people and displacing 208,000 in 28 of Nigeria’s 36 states, according to the National Emergency Management Agency.

Unrest in the nation’s Niger Delta region has equally impacted oil production, Nigeria’s main source of revenue.

Global Forecast

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 market 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 prepandemic average.”

As global disinflation continues, the IMF said services price inflation remains elevated in many regions, pointing to the importance of understanding sectoral dynamics and calibrating monetary policy.

With cyclical imbalances in the global economy waning, near-term policy priorities should be carefully calibrated to ensure a smooth landing, it said.

“At the same time, structural reforms are necessary to lift medium-term growth prospects, while support for the most vulnerable should be maintained. Chapter 3 discusses strategies to enhance the social acceptability of these reforms—a crucial prerequisite for successful implementation.”