Why Nigeria Shouldn’t Rejoice Yet On World Bank Projected Economic Growth

The World Bank 2024 projected economic growth in Sub-Saharan Africa, Nigeria part is soothing but the bank has said there is need for caution rather than celebration.

In a latest release, it observed that increased private consumption and declining inflation are supporting an economic rebound in the region, adding however that the recovery remained fragile.

This it attributes to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence.

The World Bank which made gave the projected economic growth report in its latest Africa’s Pulse report, said transformative policies are needed to address deep-rooted inequality to sustain long-term growth and effectively reduce poverty.

While it projects that that growth would rebound in 2024, rising from a low of 2.6 percent in 2023 to 3.4 percent in 2024, and 3.8 percent in 2025, the recovery it added, would remain tenuous.  .

“While inflation is cooling across most economies, falling from a median of 7.1 to 5.1 percent in 2024, it remains high compared to pre-COVID-19 pandemic levels.

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“Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems, and face unsustainable debt burdens.

“Overall, the report underscores that despite the projected boost in growth, the pace of economic expansion in the region remains below the growth rate of the previous decade (2000-2014) and is insufficient to have a significant effect on poverty reduction. Moreover, due to multiple factors including structural inequality, economic growth reduces poverty in Sub-Saharan Africa less than in other regions”.

The Eagle reports Financial Derivatives, a research and consulting firm submitting that Sub-Saharan Africa’s external debt is projected to increase by 52.32 per cent to $863.38bn in 2024 from $566.84bn in 2016.

This is linked to the region’s myriad of challenges, including coups, debt, currency pressures, and high inflation, leading to a decline in real GDP growth to 2.9 per cent from 3.7 per cent in 2022, per the World Bank.

The report predicted that the region is expected to grow by 3.8 per cent in 2024, outpacing growth in advanced economies, projected to grow at 1.2 per cent in 2024 as new growth enhancers like Tanzania and Ivory Coast sustain growth rates above 6 per cent.

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Aside the report, the World Bank observes that inequality in Sub-Saharan Africa remains one of the highest in the world, second only to the Latin America and Caribbean region.

Access to basic services, such as schooling or healthcare, it adds remains highly unequal despite recent improvements. Disparities also exist in access to markets and income-generating activities, irrespective of people’s skills. Taxes and poorly targeted subsidies may also have an outsized impact on the poor”.