The World Bank has forecast that Nigeria’s economy will grow by 3.5 per cent in 2025.
The projection, contained in the latest Global Economic Prospects report also projected that the economy would rise slightly to 3.7 per cent in 2026.
According to the report, Nigeria’s economic growth improved to an estimated 3.3 per cent in 2024, driven primarily by strong activity in the services sector, particularly financial and telecommunication services.
“In Nigeria, growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.
“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy,” the report showed.
It further pointed out that the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration.
The World Bank noted that Nigeria’s projected growth for 2025 and 2026 would be supported by gradually declining inflation, following monetary tightening measures in 2024.
This, it noted, is expected to boost domestic consumption and further support the services sector, which remains the main driver of economic growth.
The report highlighted that growth in Nigeria, alongside South Africa, contributed to a rise in the regional average to 2.2 per cent in 2024, while the rest of Sub-Saharan Africa experienced an average growth rate of 4.0 per cent during the same period.
It said Nigeria’s higher oil production and South Africa’s improved electricity supply were pivotal to this performance.
Despite these projections, the World Bank identified persistent risks to Nigeria’s economic recovery.
These include inflationary pressures, weak naira, high debt-servicing costs, and vulnerabilities in fiscal buffers.
The report emphasised the need for continued structural reforms to address these challenges and ensure sustainable growth.
