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Nigeria’s economy is expected to grow by 3.6% in 2025, up from an estimated 3.4% in 2024, as structural reforms begin to reshape its macroeconomic landscape, according to the World Bank’s latest Africa’s Pulse report released in April 2025.
Despite this positive trajectory, the Bank also paints a sobering picture of Nigeria’s deepening poverty crisis, noting that the country now accounts for 15% of the world’s extremely poor population—approximately 106 million people living on less than $2.15 per day.
Reform-Driven Growth Outlook
The World Bank’s projection reflects a relatively stronger outlook than that of the International Monetary Fund (IMF), which has revised Nigeria’s 2025 growth rate down to 3.0%, citing structural headwinds and weak oil revenues.
The expected recovery is underpinned by robust activity in non-oil sectors, particularly financial services, telecommunications, ICT, and a gradual rebound in oil production in line with Nigeria’s OPEC+ quota. If reforms continue, growth is anticipated to reach 3.8% by 2027, highlighting the importance of sustained fiscal and regulatory transformation.
“Nigeria’s growth momentum hinges on its ability to maintain reform momentum and improve productivity across critical sectors,” the report stated.
Inflation and Currency Pressures
Inflationary pressures remain a critical concern. The World Bank estimates that headline inflation will ease to 22.1% in 2025, from 26.6% in 2024, with a further decline to 15.9% by 2027. This projection is based on revised CPI figures, following the rebasing of the Consumer Price Index (CPI) by Nigeria’s National Bureau of Statistics in January 2025.
Post-rebasing, inflation figures dropped significantly—from 34.8% in December 2024 to 24.48% in January 2025—before edging slightly upward to 24.23% in March, indicating ongoing cost-of-living challenges.
In contrast, the IMF foresees inflation averaging 26.5% in 2025, escalating to 37.0% in 2026, citing persistent supply-side constraints, regulatory inefficiencies, and exchange rate volatility.
The World Bank also identified the naira as one of Africa’s worst-performing currencies in 2024, having depreciated by over 40% following Nigeria’s move to a market-driven foreign exchange regime. However, early 2025 saw improved FX liquidity and relative naira stabilization, driven by regulatory reforms.
External Balance and Fiscal Outlook
Nigeria’s current account surplus is projected to strengthen modestly, rising from 9.2% of GDP in 2024 to 9.4% by 2026, supported by higher oil exports, growing remittances, and reduced imports. However, the IMF expects the surplus to shrink to 6.9% in 2025 and 5.2% by 2026, warning that prolonged low oil prices below Nigeria’s fiscal breakeven point of $60 per barrel could erode the country’s external position.
Data from the Central Bank of Nigeria (CBN) indicates a $6.83 billion balance of payments surplus in 2024—the first in three years—driven by a goods trade surplus of $13.17 billion.
Poverty: The Looming Challenge
Despite being Africa’s largest economy by GDP, Nigeria faces an intensifying poverty crisis. The World Bank estimates that 15% of the world’s extremely poor reside in Nigeria, translating to 106.4 million people. The Bank attributes this trend to weak service delivery, governance gaps, and limited progress in high-impact sectors.
“Nigeria remains the largest contributor to extreme poverty in Sub-Saharan Africa,” the report notes, followed by the Democratic Republic of Congo, Ethiopia, and Sudan.
Projections suggest Nigeria’s poverty rate will rise by 3.6 percentage points between 2022 and 2027, despite growth in fintech, telecoms, and other service-oriented sectors. PwC warns that an additional 13 million Nigerians could fall into poverty by 2025 without immediate social and structural interventions.
Calls for Inclusive Reforms
Both the World Bank and IMF stress the urgency of inclusive economic governance, enhanced compliance management, and targeted social protections. The IMF, in its recent Article IV consultation, acknowledged Nigeria’s reforms—such as the removal of fuel subsidies, tighter monetary controls, and FX liberalization—but noted the benefits are yet to trickle down to most citizens.
“Gains have yet to benefit all Nigerians as poverty and food insecurity remain high,” the IMF stated, urging the government to redirect fiscal savings into public investments and expand cash transfer programmes.
IMF Managing Director Kristalina Georgieva highlighted the pressure on Nigeria’s budget due to declining global oil prices. “Oil producers like Nigeria are under budget pressure due to lower oil prices,” she said, noting that slower global growth poses risks to fiscal and regulatory sustainability across Africa.
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