State of the Nigerian Economy in H1’2023: Matters Arising & Key Policy Imperatives

Abstract

As the world economy grapples with the aftermath of the COVID-19 pandemic and new challenges induced by the Russia-Ukraine conflict, economic growth has trended lower, and the inflation rate has heightened in advanced and emerging economies. Overall, the combination of rising commodity prices, global inflationary pressures, and slow growth in many countries weakened the performance of the global economy in the first half of 2023. In a fashion similar to global economic performance, the Nigerian economy experienced slowed growth in the period under review. The real Gross Domestic Product (GDP) growth of 2.4 percent was the lowest economic growth since Nigeria's full recovery from the COVID-19 pandemic. The country experienced a surge in inflation, leading to a significant erosion of the local currency's value. Poverty level and other socio-economic indicators also deteriorated. In addition, the implementation of new reforms in the first half of 2023 has had a considerable impact on Nigeria’s socioeconomic performance and has informed an alteration to socioeconomic projections since the beginning of the year. In light of the assessment of global and domestic economic conditions so far in 2023, this paper suggests key measures to bring inflation under control and sustain economic growth in Nigeria.