Higher oil prices’ll drive Nigeria’s economy by 2.5% in 2022 – World Bank

The World Bank has projected a 2.5 per cent economic growth for Nigeria in 2022, and 2.8 per cent in 2023. This 2022 forecast is a slight upward review from the estimated 2.4 per cent growth in 2021.

According to the bank, higher oil prices and activities in the service sectors, such as telecommunications and financial services, will drive this slightly upward growth.

The Washington-based institution disclosed this in its latest Global Economic Prospects report released on Tuesday.

The report read in part, “In Nigeria, growth is projected to strengthen somewhat to 2.5 per cent in 2022 and 2.8 per cent in 2023.

“The oil sector should benefit from higher oil prices, a gradual easing of the Organisation of the Petroleum Exporting Countries production cuts, and domestic regulatory reforms. Activity in service sectors is expected to firm as well, particularly in telecommunications and financial services.”

It was, however, stated that the recovery from pandemic-induced income, employment losses, and inflation would be slow. It added that issues of violence and social unrest, alongside emerging COVID-19 threats, would restrain economic activities in the non-oil sector.

“However, the reversal of pandemic-induced income and employment losses is expected to be slow; this, along with high food prices, restrains a faster recovery in domestic demand.

“Activity in the non-oil economy will remain curbed by high levels of violence and social unrest, as well as the threat of fresh COVID-19 flare-ups with remaining mobility restrictions being lifted guardedly because of low vaccination rates — just about 2 per cent of the population, had been fully vaccinated by the end of 2021,” the report stated.

It also predicted that per capita income is expected to be lower in 2022 than a decade ago in countries such as Angola, Nigeria, and South Africa.

The report read, “After barely increasing last year, per capita incomes are projected to recover only at a subdued pace, rising 1.1 per cent a year in 2022-23, leaving them almost 2 per cent below 2019 levels.

“In South Africa and Nigeria, per capita incomes are projected to remain more than 3 per cent below pre-pandemic levels in 2023.” The report also said that global growth is expected to decelerate from 5.5 per cent in 2021 to 4.1 per cent in 2022, then 3.2 per cent in 2023.