How Fuel Shortage, Inflation Weaken Nigeria’s Economic Growth – World Bank

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Economists have also raised concerns that beyond inflation affecting the purchasing power of consumers, manufacturers have had to reduce the quantity and quality of their products, which has led to the sachet economy.


Recently, Nigerians have experienced fuel shortages which have drastically affected their economic activities and caused hardship across the socio-economic sphere of activities.

Meanwhile, the fuel scarcity, according to World Bank will likely restrain economic growth in Nigeria, and to avert this looming worse condition, the government and stakeholders are to ensure that energy supply and accessibility would be more than enough for everyone.

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The financial institution predicted in the June 2022 edition of its Global Economic Prospects reports that projected that Nigeria’s economy would grow by 3.4 percent in 2022 but decline to 3.2 percent in 2023 and 2024.

Meanwhile, for the first quarter of 2022, the National Bureau of Statistics reported a 3.11 percent growth, which is still less than the World Bank’s growth projection for Nigeria.

The lender said the growth in Nigeria’s economy would be driven by elevated oil prices, recovery in agriculture and manufacturing, and structural reforms (for example, the Petroleum Industry Act of 2021).

However, it noted that there would be persistent production challenges in the oil sector, which are expected to weigh on growth.

The World Bank also noted the recovery in non-oil sectors is envisioned to continue as shortages of fuel and higher food prices could restrain growth.

The bank also stressed that recurring fuel shortages and power blackouts would weigh heavily on growth. It further warned that high and persistent inflation was weighing on consumer purchasing power, especially of poor and vulnerable households.

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Economists have also raised concerns that beyond inflation affecting the purchasing power of consumers, manufacturers have had to reduce the quantity and quality of their products, which has led to the sachet economy.

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