The World Bank expects Nigeria's growth to be 3.1% rather than 3.8% in 2022.
In its most recent Nigeria Development Update (NDU), released in Abuja, the bank warned about an economic slowdown that would only worsen in the months and years to come.
The World Bank attributed the decline in the growth forecast to the third quarter's underwhelming performance in several important economic sectors.
Additionally, the bank forecasts that growth will drop to 2.9% in 2023, noting that a faster growth rate is required for Nigeria's economy to reduce poverty.
It noted that "business as usual" economic management is failing to deliver the desired outcomes, particularly in light of the recent increase in oil prices. Even if a catastrophe is prevented shortly, institutional and policy problems will persist and seriously limit economic progress.
The researchers noted that as a result, at least 80 million Nigerians live in abject poverty and that the nation can continue in this way or change course to realise its immense potential.
According to the World Bank, Nigeria's economic growth has slowed due to declining oil production and weak non-oil activity. In the first three quarters of 2022, the real GDP increased by 3.1%, slightly exceeding the 2.6% annual population growth.
Furthermore, it asserted that Nigeria's growth performance and ability to sustain fiscal and external buffers are no longer directly impacted by high oil prices, increasing macroeconomic vulnerabilities.
The International Monetary Fund (IMF) reduced its 3.2% in July to 3.0% in the October growth forecast for the Nigerian economy in 2022.
The nation's statistics office announced on Thursday that annual inflation increased for the ninth consecutive month in November, climbing to 21.47% from October's rate of 21.09%.
“Nigeria has a choice to implement critical macroeconomic and structural reforms that can reduce crisis vulnerabilities and increase growth. Doing so will lift per-capita incomes, sustainably reduce poverty and deliver better life outcomes for many Nigerians”, according to the World Bank Country Director for Nigeria, Shubham Chaudhuri.
“Urgent business-unusual choices are needed to avoid a scenario in which up to 80 million working-age Nigerians do not have a full-time job by 2030 and up to 23 million more Nigerians could be living in extreme poverty.”