By The World Bank has projected that Nigeria’s average inflation rate will ease to 22.1% in 2025, citing the Central Bank of Nigeria’s (CBN) sustained monetary tightening as a key driver of disinflation. The projection was unveiled during the launch of the latest Nigeria Development Update (NDU) report in Abuja on Monday.
The biannual report, titled “Building Momentum for Inclusive Growth,” evaluates Nigeria’s recent economic performance, identifies reform priorities, and provides a roadmap for sustaining inclusive and resilient growth.
Despite signs of economic recovery—including improved GDP growth, strengthened revenue mobilisation, and narrowing fiscal deficits—the report underscores that headline inflation remains a major policy concern. However, it noted that the CBN’s aggressive monetary stance is beginning to yield results in stabilizing prices and anchoring inflation expectations.
“Inflation has remained elevated and sticky, but is expected to decline to an annual average of 22.1% in 2025, as a credible and sustained tight monetary stance tempers inflationary pressures,” the report stated.
According to the World Bank, inflationary trends in recent years have been driven by structural and policy-related factors, including the removal of petrol subsidies, exchange rate reforms, rising logistics and energy costs, and recurring food supply disruptions.
However, the current macroeconomic trajectory shows signs of stabilization. Nigeria’s economy grew by 4.6% year-on-year in Q4 2024, culminating in 3.4% full-year growth—the strongest performance since 2014 (excluding the post-COVID rebound).
On the fiscal front, the consolidated fiscal deficit narrowed significantly from 5.4% of GDP in 2023 to 3.0% in 2024, buoyed by improved revenue mobilisation. Total government revenues surged from ₦16.8 trillion in 2023 to an estimated ₦31.9 trillion in 2024, accounting for 11.5% of GDP.
With this improved fiscal outlook, the World Bank emphasized the need for Nigeria to restructure public expenditureand channel resources toward developmental impact.
“Nigeria has made commendable progress in restoring macroeconomic stability. This provides a rare opportunity to increase the quality and quantity of public investment, especially in human capital, social protection, and infrastructure,” said Taimur Samad, Acting World Bank Country Director for Nigeria.
He added that a shift from unsustainable spending patterns is essential for unlocking long-term development and bridging critical socio-economic gaps.
Echoing this view, Alex Sienaert, the World Bank’s Lead Economist for Nigeria, emphasized the need for a collaborative public-private growth strategy. He noted that while sectors like finance and ICT have performed strongly, they remain capital-intensive and inaccessible to the broader population, limiting their impact on employment.
“Global experience shows that the public sector alone cannot drive sustainable growth or job creation. Nigeria must reposition itself to deliver essential public services while enabling private sector-led innovation and investment,” Sienaert said.
The Nigeria Development Update remains one of the World Bank’s flagship economic publications, offering timely insights into Africa’s largest economy. It serves as a critical guide for policymakers, development partners, and investors navigating Nigeria’s reform agenda.
Notably, the report comes against the backdrop of the National Bureau of Statistics’ latest inflation data, which showed headline inflation rose to 24.23% in March 2025, up from 23.18% in February.
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