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The World Bank has issued a projection indicating that Nigeria’s per capita income is anticipated to rebound to pre-pandemic levels by the year 2025.
Per capita income, measuring the average income per person in a specified area, is expected to see improvement based on gradual macro-fiscal reforms initiated by the Nigerian government, according to the Global Economic Prospects report for January 2024.
The Sub-Saharan African region, encompassing Nigeria, witnessed an economic growth slowdown, estimated at 2.9% in 2023, primarily influenced by country-specific challenges such as elevated input prices for Nigerian businesses. The three largest economies in the region—Nigeria, South Africa, and Angola—experienced a collective growth rate reduction to an average of 1.8% in 2023.
Nigeria’s economic growth in 2023 softened to an estimated 2.9%, impacted by factors such as a disruptive currency demonetization policy affecting services growth. Nevertheless, there was an increase in annual oil production following declines in previous years.
Looking ahead, the World Bank projects Nigeria’s economic growth at 3.3% for 2024 and 3.7% for 2025, representing upward adjustments from previous estimates in June last year. The anticipated improvement is attributed to the gradual impact of macro-fiscal reforms initiated by the government.
Key reforms, including the removal of the gasoline subsidy and the unification of the exchange rate, are considered essential for long-term economic stability and growth, despite causing short-term challenges. Sectors like agriculture, construction, services, and trade are expected to drive growth in the coming years.
Moreover, inflation is projected to gradually ease as the effects of last year’s exchange rate reforms and the removal of fuel subsidies fade away.
The report states, “Growth in Nigeria is projected at 3.3 per cent this year and 3.7 per cent in 2025—up 0.3 and 0.6 percentage points, respectively, since June—as macro-fiscal reforms gradually bear fruits. The baseline forecast implies that per capita income will reach its pre-pandemic level only in 2025.”
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