The World Bank has projected a 3.6% average annual economic growth for Nigeria between 2025 and 2026, driven by ongoing reforms implemented by the Federal Government.
Thank you for reading this post, don't forget to subscribe!This forecast, detailed in the World Bank’s Global Economic Prospects report for January 2025, highlights the impact of recent policy changes on business confidence and the broader economy.
The World Bank noted that Nigeria’s GDP growth increased to an estimated 3.3% in 2024, largely attributed to a strong performance in the services sector, particularly financial and telecommunication services. The ongoing fiscal and macroeconomic reforms, including the removal of fuel subsidies and controversial tax bills, have bolstered business confidence, the report said.
In response to rising inflation and a weakening naira, the Central Bank of Nigeria has implemented tighter monetary policies. Additionally, the country’s fiscal deficit narrowed, supported by a surge in revenues resulting from the elimination of implicit foreign exchange subsidies, the unification of the exchange rate, and improvements in revenue administration.
Looking forward, the World Bank expects Sub-Saharan Africa’s growth to rise to 4.1% in 2025 and 4.3% in 2026, with Nigeria’s growth forecast to strengthen to 3.6% annually over the same period. The report projects that inflation in Nigeria will gradually decline due to monetary tightening, boosting consumption and contributing to further growth in the services sector.
Oil production, a critical sector for Nigeria’s economy, is expected to increase, though it will remain below the country’s OPEC quota. In November 2024, Nigeria’s oil production rose by 152,000 barrels per day (bpd) from the previous month, reaching 1.486 million bpd. However, in December 2024, oil production declined by 1.35%, from 1.690 million bpd in November to 1.667 million bpd, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Despite this, the World Bank’s forecast anticipates continued challenges for the Nigerian economy, including food insecurity. By 2025, an estimated 25 million Nigerians are projected to face food insecurity, a number expected to rise to 27 million in 2026.
In terms of inflation, the World Bank predicts that while inflation may gradually ease due to tighter monetary policies, it will remain a persistent challenge for consumers. The report indicates that per capita income growth in Nigeria is expected to remain weak throughout the forecast period, reflecting ongoing economic challenges.
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