World Bank: Nigeria’s economy improving due to reforms

The World Bank has stated that the Nigerian economy is improving due to the country’s commitment to sustained reforms.

The World Bank’s Acting Country Director for Nigeria, Taimur Samad, made this statement based on the latest Nigeria Development Update (NDU) report, which highlighted several key indicators of progress, released on Monday, May 12, 2025.

Samad said these include a stable exchange rate, rising foreign reserves, and improved fiscal conditions.

Samad said the improvement in fiscal conditions were primarily driven by increased federation revenues, which had contributed to the positive economic outlook for the country.

He stated that economic growth in the last quarter of 2024 had surged to 4.6 per cent on a year-on-year basis, bringing the full-year growth for 2024 to 3.4 per cent, the highest since 2014, excluding the 2021-2022 COVID-19 rebound.

The World Bank official said: “Additionally, the fiscal deficit shrank from 5.4 per cent of Gross Domestic Product (GDP) in 2023 to 3.0 per cent of Gross Domestic Product (GDP) in 2024.

“This positive trend was driven by a sharp rise in federation revenues, which increased from N16.8 trillion in 2023, 7.2 per cent of GDP to an estimated N31.9 trillion in 2024, 11.5 per cent of GDP.”

Naira trades N1,600/$ at official market

Despite these gains, Samad emphasised that many challenges remained, including persistent high inflation.

He stressed the importance of the Central Bank of Nigeria (CBN) maintaining tight monetary policies to ensure continued economic stability.

If successful, he projected that inflation would fall to just more than 22 per cent on an annual average by 2025, marking a major achievement.

The report also highlighted that staying the course on macro-fiscal reforms would provide an opportunity to foster private sector growth and create jobs for Nigerians.

“However, it was clear that sustained momentum and further reforms are necessary to drive growth and expand economic opportunities,” Samad added.

The World Bank’s Lead Economist for Nigeria, Alex Sienaert, provided further insights, stressing the need for careful monitoring of revenue gains from the fuel subsidy removal and cautioning against overly ambitious budget projections for 2025.

Sienaert also emphasised the importance of scaling up the targeted cash transfer programme to assist vulnerable populations.

Sienaert outlined several steps for achieving macroeconomic stability, including reducing the cost of governance and accelerating the pace of economic growth.

The Star