The World Bank’s latest predictions anticipate a positive trajectory for Nigeria’s economy, forecasting a 3.7% increase in GDP by 2025.
Despite challenges, including inflation and public debt, macro-fiscal reforms and strategic initiatives are expected to drive growth.
Nigeria, Africa’s largest economy, is poised to experience a growth uptick from a projected 3.3% in 2023 to 3.7% in 2025, as outlined in the World Bank’s “Global Economic Prospect: Subdued Growth, Multiple Challenges” report. This forecast reflects a gradual improvement attributed to ongoing macro-fiscal reforms yielding fruit over time.
President Bola Tinubu’s administration has implemented significant reforms focusing on infrastructure, manufacturing, and technology. Key measures such as fuel subsidy elimination and foreign exchange rate harmonization are contributing to the nation’s economic momentum.
According to the World Bank, sectors such as commerce, services, construction, and agriculture will be instrumental in propelling Nigeria’s economic growth trajectory.
However, challenges persist, including food insecurity, which has risen by 133% over three years, as reported in the 2023 State of Global Food and Nutrition Security report. Additionally, inflation reached a 21-year high of 28.92% in December 2023, while public debt surged to N87.91 trillion in the same period, posing concerns for Nigeria’s fiscal outlook.
Nevertheless, structural reforms are expected to alleviate inflationary pressures and boost fiscal revenue in the long run. The report highlights the disruptive impact of currency demonetization policies on the Nigerian economy, contributing to a softening growth rate of 2.9% in 2023.
While Nigeria’s growth prospects are promising, sustained efforts are needed to address challenges such as inflation, public debt, and economic diversification. The UN’s “World Economic Situation and Prospects 2024” study underscores the importance of in-country oil refining capacity expansion and energy subsidy reforms to mitigate fiscal constraints and promote economic resilience in African nations.
