The United Nations (UN) has predicted a decline in Nigeria’s price of petrol in 2024.
According to the United Nations World Economic Situation and Prospects (WESP) report for 2024, Nigeria will achieve that with an increased domestic oil refining capacity.
“Efforts to increase in-country oil refining capacity would likely reduce domestic fuel costs in 2024 and beyond,” the report stated.
The report produced by the United Nations Department of Economic and Social Affairs (UN DESA), in partnership with the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions, also projected a slight increase in Nigeria’s growth rate, from 2.9 percent in 202 to 3.1 percent in 2024.
A moderate improvement in Nigeria’s growth prospects for 2024, with a Gross Domestic Product (GDP) growth prediction of 3.1 percent, was attributed to policy reforms implemented by the government in 2023, particularly in the hydrocarbon industry.
“Policy reforms enacted by the government of Nigeria in 2023, especially in the hydrocarbon sector, have contributed to a moderate improvement in the country’s growth prospects for 2024, with GDP growth forecast at 3.1 percent.
With Nigeria’s inflation rate currently at 28.2 percent and a public debt of N87.38 trillion in Q2, 2023, from N49.85 trillion in Q1, according to the Nigerian Bureau of Statistics (NBS), the report however, mentioned that the nation’s increasing public debt, persistent inflation as well as its rising cost of living pose serious risks to the country’s economic growth this year.
“However, ballooning public debt, persistent inflation, and a rising cost of living, together with a weak business environment, will pose a downward risk to growth prospects,” the report stated.
International trade remained sluggish globally in 2023, as indicated in the report with Africa accounting for a portion of the trend and experiencing almost no year-over-year rise in the volume of commercial trade in the continent.
The UN report likewise stated that the external environment is expected to remain unfavourable for the African economies because of a weak outlook for the global economy and limited opportunities for external financing, even though the average GDP growth of African economies is predicted to improve moderately in 2024, reaching 3.5 per cent.
With overall GDP growth in African economies forecast to register moderate improvement in 2024, increasing to 3.5 per cent on average, the UN report added that external conditions are projected to remain unfavourable for the African economies due to a weak global economic outlook and limited external financing opportunities.
“However, a recovery in domestic demand is projected for those countries that experienced economic shocks stemming from currency depreciations, electricity shortages, or armed conflict,” it added.
The report further asserts that African economies have fewer options for refinancing and external funding due to the stringent financing conditions in international capital markets, which are a result of the monetary policy positions of the European Central Bank and the US Federal Reserve.
“Consequently, African currencies – with the exception of the institutionally pegged CFA Franc – faced a depreciation pressures due to weak export earnings and limited external financing inflows.
“While these deteriorating external conditions limited the scope for economic expansion, factor such as armed conflicts, political instabilities, extreme climate events, and infrastructure bottlenecks also depressed domestic demand growth,” it stated.
Source: The Nation
