Nigeria’s Growth Outlook

Forecasting Nigeria’s 2023 growth outlook has become an uphill task due to the multidimensional uncertainty that characterizes the year. The naira redesign policy is causing monumental disruption both in the real and financial sectors. The 2023 presidential election, with its intrigues, is demasking the country’s vulnerability and making investors increasingly unsettled. In the same vein, the persistent inflationary surge is brewing investor tentativeness as monetary policy tightening could become the new normal. 

According to the FDC forecast, a base case scenario shows that Nigeria's real GDP growth will slow to 2.55% in 2023 from an estimated growth rate of 2.71% in 2022. However, the worst and best case projections show that growth may slow to a low of 1.33% or expand by 3.10% in 2023 respectively. The subdued growth would be bookended by the naira cash crunch, election uncertainty, weak private consumption growth, and a tepid investment outlook. Elevated inflation, the naira redesign program, and restrictive monetary policy will also weigh on the overall outlook.