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Nigeria May Experience Slow Economic Growth In 2023—Report

Nigeria is expected to experience a drastic drop in the global economy following the effect of COVID-19, the Russian-Ukarine war and the strong United States (US) dollar, exchange rate.

The information was disclosed by experts at the CAPE Economic Research and Consulting firm, contained in its Economic Newsletter, Volume one dated December 4.

Another factor cited by the report is the effect of current inflation rate on the country’s economy.

The report said, “This expectation is anchored on the likely expansion of aggregate demand driven by the upscale in election-related spending and activities ahead of the voting in 2023, as well as festivities amid multiple headwinds including high energy prices, large-scale flooding, deteriorating foreign exchange rate, infrastructural deficit, structural bottlenecks, widening infrastructural deficit, and elevated cost of production.

“The rising prices of commodities (food and energy) at the global level are fueling food prices and utilities in Nigeria through imported food (raw and processed) and refined energy products output growth is expected to slow down albeit remain positive in Q4 2022 and we anticipate a trenchant 2023 with a slowdown in the global economy and the risk of a recession more pronounced.”

The experts further revealed that 2023 will “feel hard-hitting for economic agents” as the slowdown in the global economy would have a direct effect on the disposable income and purchasing capacity of households.

The report also revealed that more economies across the region will slip into visible recession in 2023 while in developing economies the recession drivers are likely to remain dominant.

Inflation, according to the report, is expected to “peak in most economies across the globe between December 2022 and the first quarter of 2023 after which a deceleration would commence”.

On February 24, Russia invaded Ukraine in a major escalation of the Russo-Ukrainian war that began in 2014. The invasion is reported to have claimed the lives of many on both sides and caused Europe’s largest refugee crisis since World War II.

Reports said, by late May, about 8 million people were displaced in Europe and 7.8 Ukrainians had fled the country within five weeks of the invasion as of November 8.


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