W’Bank projects 3.5% GDP growth for Nigeria in 2025

The World Bank has forecasted that Nigeria’s economy will grow by 3.5 per cent in 2025 and rise slightly to 3.7 per cent in 2026.

This projection, contained in the latest Global Economic Prospects report, reflects a modest recovery for the nation amidst persistent economic challenges and global uncertainties.

According to the report, Nigeria’s economic growth improved to an estimated 3.3 per cent in 2024, driven primarily by strong activity in the services sector, particularly financial and telecommunication services.

The report read, “In Nigeria, growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.

“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy.

“Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration.”

The World Bank noted that Nigeria’s projected growth for 2025 and 2026 would be supported by gradually declining inflation, following monetary tightening measures in 2024.

This is expected to boost domestic consumption and further support the services sector, which remains the main driver of economic growth.

The report highlighted that growth in Nigeria, alongside South Africa, contributed to a rise in the regional average to 2.2 per cent in 2024.

Nigeria’s higher oil production and South Africa’s improved electricity supply were pivotal to this performance.

The rest of Sub-Saharan Africa experienced an average growth rate of 4.0 per cent during the same period.

The World Bank expects Nigeria’s economic growth to strengthen to an average of 3.6 per cent annually in 2025 and 2026, with robust services sector activity and recovering domestic demand playing a central role.

Its report read, “Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent a year in 2025-26.

“Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth.

“Oil production is expected to increase over the forecast period but remain below the OPEC quota. The baseline forecast implies that per capita income growth will remain weak over the forecast horizon.”

Despite these projections, the World Bank identified persistent risks to Nigeria’s economic recovery.

These include inflationary pressures, weak naira, high debt-servicing costs, and vulnerabilities in fiscal buffers.

The report emphasised the need for continued structural reforms to address these challenges and ensure sustainable growth.