Nigeria’s economy recorded its fastest growth in about a decade in 2024, the World Bank said yesterday, alluding to early gains of macroeconomic reforms by the President Bola Tinubu’s administration.
World Bank’s Lead Economist for Nigeria, Alex Sienaert, pointed out Federal Government’s improved fiscal position, driven by reforms in key areas of petroleum, foreign exchange and power.
He however cautioned that persistently high inflation remains a challenge.
Sienaert spoke in Abuja at the unveiling of the Nigeria Development Update (NDU) report titled “Building Momentum for Inclusive Growth”.
He commended the Nigerian government for implementing macroeconomic reforms that have stabilized the economy.
The World Bank report indicated that Nigeria’s Gross Domestic Product (GDP) recorded 4.6 per cent year-on-year growth in fourth quarter 2024, bringing the economic growth for 2024 to 3.4 per cent, the highest since 2014.
The country’s fiscal deficit also reduced from 5.4 per cent of GDP in 2023 to 3.0 per cent of GDP in 2024, on the back of significant increase in national revenue, which rose from N16.8 trillion in 2023 to N31.9 trillion in 2024.
The World Bank expects Nigeria’s economy to grow 3.6 per cent this year.
Sienaert said the Nigerian economy has continued to expand in early 2025 based on high-frequency business indicators.
He listed bold reforms implemented by President Tinubu to include ending costly petrol subsidies, slashing electricity allowances and twice devaluing the naira currency, as contributing to upward pressure on prices.
He pointed out that more efforts are needed to ensure that the economic growth is inclusive, particularly through expanding cash transfer programmes for the vulnerable populations in the country.
He noted that Nigeria’s foreign exchange reforms have created a market-reflective, unified and stable exchange rate, allowing the central bank to rebuild official reserves, now exceeding $37 billion.
“That’s significant because this is the cushion the economy has against external volatility,” Sienaert said.
He however pointed out that international experience shows that the public sector alone cannot generate sustainable economic growth and jobs.
He stressed that public resources remain limited and that a successful strategy for Nigeria would involve positioning the public sector to both provide essential services—such as human capital development and infrastructure—and create an enabling environment for the private sector to thrive.
“Nigeria is no exception, particularly since public resources remain constrained. A useful strategy is to position the public sector to play a dual role as a provider of essential public services, especially to build human capital and infrastructure, and as an enabler for the private sector to invest, innovate, and grow the economy,” Sienaert said.
He noted that the full fiscal benefits of subsidy removal have yet to be realized, urging Nigerian authorities to maintain tight monetary and disciplined fiscal policies to contain inflation and ensure long-term economic stability.
Sienaert said government revenue rose by 4.5 per cent of GDP last year, a “remarkable achievement” driven by the removal of foreign exchange subsidies, improved tax administration and higher remittances.
Acting World Bank Country Director for Nigeria, Taimur Samad said Nigeria has made impressive strides in restoring macroeconomic stability and now in better position to accelerate growth and stability.
“With improvements in the fiscal position, Nigeria now has a historic opportunity to enhance development spending, focusing more on human capital, social protection, and infrastructure. The allocation of public resources can begin to shift away from past unsustainable practices and instead address Nigeria’s large development needs, with the government playing a crucial role in providing basic public services and enabling private sector-led growth,” Samad said.
The World Bank envisaged that Nigeria’s economy needs to grow at a rate five times faster than its current pace to achieve the $1 trillion target by 2030 as well as address the country’s rising poverty levels.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, underlined government’s commitment to macroeconomic stability.
He noted that macroeconomic stability is crucial, while pointing out government’s efforts at restoring transparency in the oil sector.
“We need to push for transparency in the oil sector, which is key to achieving our economic goals. Investment plays a critical role in creating jobs, and we must maintain the momentum to attract more investments into the country,” Edun said.
He underscored ongoing efforts to digitalize social safety nets and ensure that cash transfer programmes reach those who need them the most.
He appreciated World Bank’s support and recognition of Nigeria’s progress.
Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso, who addressed the role of the apex bank in safeguarding economic stability, particularly in the foreign exchange market, assured that the bank is committed to stable policy execution.
He said: “We will continue to protect the economy. With that comes a need to be proactive”.
Cardoso expressed confidence that the ongoing policies will lead to a moderation of inflation and interest rates over time.
He also stressed the importance of financial inclusion, noting that the CBN is committed to supporting the fintech sector and improving access to finance for all Nigerians.
The World Bank’s NDU report then noted the urgent need for Nigeria to accelerate its economic growth to meet its aspirations of a $1 trillion economy by 2030. The report stated that this can only be achieved by rebalancing the growth composition toward more productive sectors that create jobs and opportunities for the poor and economically insecure.
While sectors like finance and information and communication technology (ICT) have been key drivers of economic growth, they do not provide mass employment opportunities, as many Nigerians lack the skills to participate in these industries.
The World Bank then proposed a growth strategy led by the private sector but facilitated by the public sector. Critical to this strategy is addressing infrastructure gaps—particularly in electricity and transportation—and fostering a competitive business environment that encourages market openness. Improving access to finance for new and existing businesses and refining policies in key sectors will also help unlock economic potential.
Despite these positive developments, inflation remains high but is projected to decrease to an annual average of 22.1 per cent in 2025, aided by a continued tight monetary policy stance.
The World Bank report stressed the need for deeper, wider structural reforms to consolidate macroeconomic stability and ignite inclusive growth. It further noted the importance of generating better jobs at scale to reduce poverty.
Dignitaries at the unveiling event also included Minister of Communications and Digital Economy, Bosun Tijani; Minister of Budget and Economic Planning Abubakar Bagudu; Plateau State Governor, Caleb Mutfwang and Managing Director, UAC Foods, Oluyemi Oloyede among others.
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