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Multiple Exchange Rates Hampering Nigerian Economy Growth – World Bank

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CEM REPORT, ECONOMY | The World Bank has projected Nigeria’s economic growth to move slightly by three per cent between 2024 and 2025.

This is as the bank noted that multiple exchange rates are hampering the growth of the nation’s economy.

According to the bank’s Africa Pulse Report April 2023 edition titled “Leveraging Resource Wealth During the Low Carbon Transition” the projected growth will translate to a 0.2 per cent growth per capita in 2023 and 0.4 per cent in 2024 and 2025.

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The report stated that the projected growth would be driven by agriculture, and trade, among others noting that the projected growth is insufficient to reduce extreme poverty in the country,

Furthermore, the report places Nigeria’s economy growth at 2.8 per cent in 2023, a significant drop from the 3.3 per cent recorded in 2022.

Speaking at the Spring Meetings of the International Monetary Fund and World Bank in Washington DC, the President of the World Bank, David Malpass, urged the Nigerian government to ease trade restrictions and diversify its economy to achieve shared prosperity and sustainable growth.

He stressed the need to focus on improving electricity, access to clean water, and more investment in agriculture, which would help trigger faster growth.

“For Nigeria, the growth was 3.3 per cent in 2022 and 2.8 per cent in 2023 within our forecast, and our high priority for the World Bank is shared prosperity sustainably. And so, as we think about Nigeria, many changes are needed to allow that process to proceed

“Nigeria has a big chunk of its GDP is oil and it means that a lot of people in Nigeria are facing poverty, and that needs to be a direct focus.  And they also face insecurity across the northern and western regions that are very challenging. And so, the World Bank is working hard within Nigeria but also working to try to have an economic system that can be more productive, and that means Nigeria has trade protection that blocks market development.”

“They have a dual exchange rate that is very expensive for the people of Nigeria to maintain that dual exchange rate system. They have high inflation and not enough diversification of the economy to make sufficient progress.”

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