World bank projects economic growth for Nigeria in 2025, 2026

This information was released in the bank’s report published yesterday titled ‘Global Economic Prospects, January 2025’.

The report highlights that recent reforms by the Federal Government have contributed to increased business confidence, particularly the removal of fuel subsidies and other contentious tax measures.

The World Bank noted that GDP growth in Nigeria is estimated at 3.3% for 2024, primarily propelled by activity in the services sector, especially in financial and telecommunications services. It stated, “Macroeconomic and fiscal reforms have bolstered business confidence. In response to rising inflation and a weakening naira, the central bank has tightened monetary policy.”

It also highlighted that the fiscal deficit has narrowed, driven by a surge in revenues from eliminating the implicit foreign exchange subsidy, resulting from the unification of the exchange rate and better revenue management.

In Sub-Saharan Africa, growth is projected to strengthen to 4.1% in 2025 and 4.3% in 2026, as financial conditions improve and inflation decreases.

Adjustments have been made to growth projections for 2025 and 2026, with estimates up by 0.2 and 0.3 percentage points, respectively, benefiting nearly half of the economies in the region.

For Nigeria, growth is anticipated to average 3.6% annually during 2025-26, with inflation expected to gradually decline due to monetary policy tightening in 2024, thereby enhancing consumption and service sector growth.

The report also mentions that oil production is projected to rise but remain under the OPEC quota.

Nigeria’s oil production saw only marginal growth over the past year. According to OPEC’s latest monthly oil market report, daily oil production increased by 152,000 barrels per day in November 2024, reaching 1.486 million barrels, up from 1.333 million in October.

However, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported a slight month-on-month decline in December 2024, dropping 1.35% to an average of 1.667 million barrels per day from 1.690 million in November. The peak oil production in December reached 1.79 million barrels per day, while the lowest was 1.57 million.

Overall, cumulative oil output for December was recorded at 51.69 million barrels, reflecting a marginal increase of 1.9% compared to 50.71 million barrels in November.

The World Bank’s report emphasizes that per capita income growth is expected to remain weak throughout the forecast period.