The United Nations World Economic Situation and Prospects (WESP) report for 2024 indicates a slight increase in Nigeria’s growth rate, projected to rise from 2.9% in 2023 to 3.1% in 2024.
The report shows that Africa’s growth rate is to rise from 3.3% in 2023 to 3.5% in 2024. In contrast, global growth is expected to decelerate from 2.7% in 2023 to 2.4% in 2024.
The report reveals that Least Developed Countries (LDCs) are anticipated to achieve a growth rate of 5% in 2024. However, this falls short of the 7% growth target outlined in the Sustainable Development Goals (SDG).
The Nigerian Economy projection
According to the report, policy reforms enacted by the Government of Nigeria in 2023, especially in the hydrocarbon sector, have contributed to a moderate improvement in the country’s growth prospects for 2024, with GDP growth forecast at 3.1%.
- However, ballooning public debt, persistent inflation and a rising cost of living, together with a weak business environment, will pose a downward risk to growth prospects.
- Efforts to increase in-country oil refining capacity would likely reduce domestic fuel costs in 2024 and beyond.
The UN Report on the African Economy Growth
- GDP growth in African economies is forecast to register moderate improvement in 2024, increasing to 3.5 per cent on average.
- External conditions are projected to remain unfavourable for the African economies due to a weak global economic outlook and limited external financing opportunities.
- However, a recovery in domestic demand is projected for those countries that experienced economic shocks stemming from currency depreciations, electricity shortages or armed conflict.
Developed countries vs developing countries
- The global labour market presents a varied post-pandemic scenario, with developed countries experiencing robust recovery and low unemployment rates.
- However, real income losses and labour shortages pose challenges, while developing countries show mixed progress, with persisting gender gaps and high youth unemployment.
- Investment growth faces challenges globally, with a notable slowdown in both developed and developing economies.
- While developed countries channel investments into sustainable sectors, developing countries struggle with capital flight and reduced foreign direct investment.
International trade as a growth driver is losing steam, with global trade growth weakening to 0.6% in 2023, and projected to recover to 2.4% in 2024.
Factors impeding trade growth include shifts in consumer spending, geopolitical tensions, supply chain disruptions, and the lingering effects of the pandemic.
Developing countries face challenges such as high external debt levels and rising interest rates, making access to international capital markets difficult. Declines in official development assistance and foreign direct investment for low-income countries contribute to debt sustainability challenges.
The report also underscores the worsening impact of climate change, with extreme weather conditions in 2023 leading to devastating wildfires, floods, and droughts globally.
These events have direct economic consequences, affecting infrastructure, agriculture, and livelihoods. Studies suggest substantial global economic losses due to climate change, emphasizing the urgent need for mitigation efforts.
