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The World Bank has released its latest report titled “Global Economic Prospect: Subdued Growth, Multiple Challenges,” projecting a 3.7% growth in Nigeria’s Gross Domestic Product (GDP) for the year 2025. This forecast indicates an improvement from the projected 3.3% growth for the year 2023, highlighting positive momentum in the country’s economic outlook.
The report suggests that the gradual realization of macro-fiscal reforms is contributing to Nigeria’s economic growth. President Bola Tinubu’s administration has initiated reforms such as the removal of fuel subsidies and foreign exchange rate harmonization, with a strategic focus on infrastructure development, manufacturing, and technology.
The World Bank anticipates that agriculture, construction, services, and trade will be key drivers of Nigeria’s economic growth in the coming years. The country’s macro-fiscal reforms are expected to bear fruit, leading to increased fiscal revenue over the forecast period.
The report acknowledges that Nigeria’s economic growth softened to an estimated 2.9% in 2023 due to the disruptive currency demonetization policy, which involved replacing old high-denomination naira notes. Despite this, the World Bank remains optimistic about Nigeria’s economic trajectory, projecting a return to pre-pandemic per capita income levels by 2025.
The report also highlights challenges faced by the region, including slowing growth in the three largest economies—Nigeria, South Africa, and Angola. External demand weakening and domestic policy tightening to address persistent inflation have contributed to slower post-pandemic recoveries in the region.
Concerns, however, persist about rising public debt, persistent inflation, a high cost of living, and a weak business environment, posing potential downward risks to Nigeria’s growth prospects. As of Q3 2023, Nigeria’s GDP stood at N60.66 trillion, with a growth rate of 2.54%. Rising inflation and public debt remain areas of focus for sustainable economic development.
The United Nations, in its ‘World Economic Situation and Prospects 2024’ report, has also noted that African countries may face challenges in fiscal positions due to high public debt and a low domestic revenue base in 2023.
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