World Bank Says Nigeria’s Macroeconomic Indices Are Improving, Projects 22.1% Average Inflation in 2025

The World Bank says that Nigeria’s macroeconomic prospects are starting to be more promising following a series of budgetary and monetary reforms that have been deployed in the past year. But while the country can go back from the edge, the bank warns that the real inclusive development will require much more than positive figures for GDP or an increase in government income – it will require daring and targeted efforts to rebalance the economy of the land.

The evaluation was captured in the latest development report for the development of Nigeria (NDU) entitled “Building Moonm for inclusive Growth”, published Monday in Abuja. For the first time in years, Nigeria has displayed figures that suggest a change of orientation: the economy increased by 4.6% in annual sliding in the fourth quarter of 2024, which pushed the GDP growth to 3.4%, the strongest non-comfortable rebound since 2014.

This figure excludes the temporary rebounds recorded during the COVID-19 years, when a brief post-weight overvoltage has masked the underlying weaknesses. This time, the World Bank attributes the gains to the “supported policies reforms and to the improvement of the mobilization of income”, pointing in particular controversial controversial but undoubtedly necessary decisions of the Tinubu administration to put an end to petrol subsidies and unify the exchange rate.

“Nigeria has made impressive progress to restore macroeconomic stability,” said Taimur Samad, director of the World Bank’s acting country in Nigeria. He noted that the narrowing of the country’s budget deficit of 5.4% of GDP in 2023 to 3.0% in 2024 marks an important step in the country’s efforts to escape its long -standing budgetary crisis.

But it was the income of the big book that drew special attention. The government’s profits have more than doubled, from 18.8 Billions of Nairas in 2023 (approximately 7.2% of GDP) to approximately 31.9 Billions of Nairas in 2024 (11.5% of GDP). According to the report, this spectacular increase in public income opened the door to budgetary consolidation and the strengthening of external stamps, at a time when foreign reserves of Nigeria and the stability of currencies remain the main concerns of investors.

However, despite the optimistic tone of growth figures, the report underlines a deeper reality – noting that growth remains unequal, exclusive and structurally fragile.

Most of the recent GDP growth is concentrated in sectors such as finance and ICT industries, with a limited capacity to absorb the massive and largely unskilled workforce in Nigeria. Millions of Nigerians are still locked in these sectors due to limited access, education or digital literacy. And while macro indicators can increase, poverty and unemployment remain stubbornly high.

The World Bank noted that if Nigeria had to reach its ambition to become an economy of $ 1 Billion by 2030 – a objective recently reiterated by decision -makers – it must basically change what is developing, how it increases and which benefits from this growth.

“International experience suggests that the public sector cannot sustainably generate growth and jobs in itself. Nigeria is no exception, especially since public resources remain limited, “said Alex Sienaert, leader economist from Nigeria to the World Bank.

Instead, Sienaert pleads for a double role: a government that provides both essential public services and creates the environment empowering for investment and innovation led by the private sector. Without such an approach, warns the report, the country risks going back into the same cycle of booms and busts that torment its economy for decades.

Inflation is always a thorn

Macro reforms may have improved the income and the feeling of investors, but ordinary Nigerians are always under the weight of high prices. The World Bank recognizes that inflation, caused by the suppression of fuel subsidies, realignment of exchange rates, high energy and logistics costs and persistent disturbances in food supply, remains “high and sticky”.

The report provides that inflation will begin to relieve itself, with an average of 22.1% in 2025, because the aggressive monetary tightening of Nigeria begins to bear fruit. The recent evolution of the CBN to a narrower position, marked by successive interest rate increases and efforts to mop up excess liquidity, is credited for anchoring inflation expectations.

However, the report does not declare victory, noting that structural problems – such as low agricultural productivity, poor logistics infrastructure and creeping insecurity in food producing food – continue to pose serious risks for stability and food access prices.

Lessons from the past

The latest gains from Nigeria reflect brief periods of budgetary discipline observed in previous administrations, often triggered by crises or multilateral pressure. The BUHARI administration, for example, undertook minor reforms under the supervision of the IMF during the 2016 recession, but then reversed the price when oil prices rebounded. Many observers fear that a similar scheme can emerge again if the current increase in income is not channeled in long -term investments.

This time, however, the World Bank sees an opening – if the government can hold its nerve.

“With the improvement of the budgetary situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending,” said Samad. “This includes investment more in human capital, social protection and infrastructure.”

But it was not long in adding a warning: the allocation of public resources must pass “unsustainable models” spent towards development priorities which reduce inequalities and empower the private sector.

Can reforms provide jobs?

At the heart of the World Bank’s argument is the belief that Nigeria reforms, although painful, can be made to work, provided that they are accompanied by deeper structural changes which deal with the deep causes of economic exclusion.

The NDU recommends a four -steal strategy: improve infrastructure, extend access to credit, stimulate competition in the key sectors and revive policies in agriculture, manufacturing and informal trade that affect large -scale employment.

The World Bank is particularly focused on sectors that can provide wide jobs, such as construction, agro-treatment and light manufacturing. The Bretton Wood Institute notes that without a deliberate pivot in this direction, Nigeria risks reproducing the phenomenon of “unemployment growth” which characterized a large part of its past economic performance.

With a population approaching 230 million and increases rapidly, Nigeria must create millions of jobs a year just to keep pace. Any growth model that does not provide a large -scale job, suggests the report, is likely to collapse under the weight of the increase in inequality, disorders and political instability.

This means that the path of the Nigeria path depends not only to stick to the reform, but to reform with a human face, ensuring that macro stability results in a better life for ordinary citizens.