IMF revises Nigeria’s GDP growth to 3.3% in 2024

The International Monetary Fund (IMF) has revised Nigeria's GDP growth to 3.3% in 2024, according to its April 2024 World Economic Outlook. This adjustment comes amidst a broader projection for Sub-Saharan Africa, with the IMF expecting a regional GDP growth of 3.8% this year. Bongo Adi, Professor of Economics at Lagos Business School, joined CNBC Africa to provide insights into the implications of these revisions. Adi highlighted the challenges and opportunities facing Nigeria's economy and shed light on sectoral sensitivities affecting growth prospects. The discussion touched on the impact of budgetary support, exchange rate stability, inflation drivers, and the manufacturing sector's performance. Let's delve deeper into the key points raised during the interview. Firstly, Adi acknowledged Nigeria's gradual economic growth momentum, emphasizing that the country has managed to steer clear of recession despite facing global headwinds. He attributed this resilience to the Central Bank of Nigeria's (CBN) efforts in stabilizing the exchange rate and restoring confidence in the economy. Adi noted that external factors, such as diaspora remittances, trade, and capital flows, play a significant role in driving Nigeria's economic performance. He expressed cautious optimism regarding the IMF's growth forecast, citing ongoing policy measures aimed at addressing inflation and exchange rate challenges. Secondly, the discussion turned to sectoral sensitivities, particularly focusing on inflation dynamics and the manufacturing sector. Adi highlighted that food inflation remains a key driver of overall inflation, stemming from logistical disruptions, insecurity, and environmental factors. The reliance on food imports due to domestic production challenges has exacerbated inflationary pressures, affecting household welfare. Adi suggested that inflation may moderate as exchange rate stability improves, signaling potential relief for consumers. However, he acknowledged the need for sustained government interventions to support the manufacturing sector and enhance productivity. Lastly, Adi addressed lingering concerns such as foreign portfolio investments (FPIs), insecurity, and social welfare issues. While recent measures have attracted increased FPI flows, challenges related to insecurity and social welfare persist. Adi emphasized the importance of addressing multidimensional poverty and bolstering security to foster a conducive business environment. The conversation underscored the complex interplay of economic variables and policy actions shaping Nigeria's economic trajectory in 2024. In conclusion, navigating Nigeria's economic landscape in 2024 requires a multifaceted approach that addresses macroeconomic fundamentals, sectoral challenges, and socio-economic considerations. As the country strives to achieve sustainable growth and mitigate existing vulnerabilities, stakeholders must collaborate to implement targeted interventions and policy reforms. With proactive measures and a conducive policy environment, Nigeria can harness its economic potential and chart a path towards inclusive and resilient growth. The IMF's revised GDP growth forecast serves as a guidepost for policymakers and investors, signaling the need for strategic decision-making and adaptive strategies in a dynamic global economic landscape.