The World Bank has issued a positive economic outlook for Nigeria, projecting a Gross Domestic Product (GDP) growth of 3.7% in the year 2025. This forecast, outlined in the latest report titled “Global Economic Prospect: Subdued Growth, Multiple Challenges,” represents an improvement from the previously projected 2.9% for the year 2023.
The report emphasized that the largest economy in Africa is expected to experience a growth rate of 3.3% in the current year, with further expansion to 3.7% in 2025. This positive trajectory is attributed to the gradual realization of macro-fiscal reforms implemented by President Bola Tinubu’s administration.
The World Bank acknowledged key reforms such as the removal of fuel subsidies and foreign exchange rate harmonization, coupled with a strategic focus on infrastructure development, manufacturing, and technology. These measures are anticipated to contribute to the country’s economic growth, with specific sectors driving the momentum including agriculture, construction, services, and trade.
The Washington-based institution noted that the baseline forecast suggests that per capita income is expected to return to its pre-pandemic level only by the year 2025. The report also highlighted the easing of inflationary pressures as the effects of last year’s exchange rate reforms and the removal of fuel subsidies diminish.
While recognizing the resilience of the Nigerian economy, the World Bank acknowledged that the country’s GDP softened to an estimated 2.9% in 2023. This dip was attributed to the disruptive currency demonetization policy, involving the replacement of old high-denomination naira notes.
The report also commented on the broader economic context in the region, noting that the growth in the three largest economies in Africa—Nigeria, South Africa, and Angola—slowed to an average of 1.8% last year. External demand weakening and domestic policy tightening to address persistent inflation were identified as factors contributing to post-pandemic recoveries being slowed in various countries.
In terms of Nigeria’s economic indicators, the National Bureau of Statistics reported a GDP of N60.66 trillion in the third quarter of 2023, reflecting a growth rate of 2.54%. While this rate was higher than the figures recorded in the same period in 2022, concerns persist over rising public debt, persistent inflation, high living costs, and a weak business environment, which may pose downward risks to the country’s growth prospects.
As of the third quarter of 2023, Nigeria’s public debt stood at N87.91 trillion, and inflation rose to a 21-year high of 28.92% in December 2023. Despite these challenges, the World Bank’s optimistic growth projection suggests a positive trajectory for the Nigerian economy in the coming years.
