The World Bank has called on the Nigerian government to do more to improve living standards and tackle soaring food prices amid improved economic indicators.
The Bretton Woods-based lender said in a report released on Wednesday that there has been progress in economic growth, revenue mobilisation, and external balances after the country removed its fuel subsidy, devalued the Naira and reformed taxes. However, it warned that high food inflation and widespread poverty continued to weigh heavily on households.
According to the latest Nigeria Development Update (NDU) released today, titled From Policy to People: Bringing the Reform Gains Home, more needs to be done by the President Bola Tinubu-led administration to ensure these gains translate into better living standards for its citizens.
The NDU said Nigeria’s economy expanded by 3.9 per cent year-on-year in the first half of 2025, up from 3.5 per cent in the same period of 2024, with growth driven by strong performance in services and non-oil industries, alongside improvements in oil production and agriculture.
It also highlighted that the country’s external position has strengthened, with foreign reserves exceeding $42 billion and the current account surplus rising to 6.1 per cent of GDP, supported by higher non-oil exports and lower oil imports.
On the fiscal side, the World Bank said that despite lower oil prices, the federal deficit is projected at 2.6 per cent of Gross Domestic Product (GDP) in 2025, broadly unchanged from 2024, while public debt is expected to decline for the first time in over a decade—from 42.9 to 39.8 per cent of GDP.
The lender warned that these macroeconomic gains have yet to translate into tangible improvements in people’s lives.
“Many households continue to face hardship, with poverty and food insecurity remaining high. Food inflation remains a major concern: poor households—who spend up to 70% of their income on food—have seen the cost of a basic food basket rise fivefold between 2019 and 2024,” it warned.
The NDU also noted that while current reforms are addressing long-standing policy distortions, sustained progress in livelihoods will depend on continued efforts to reduce inflation, foster inclusive growth, strengthen public services, and expand support for the most vulnerable.
The report identifies three urgent priorities for the Tinubu administration including tackling food inflation by removing trade barriers, improving the efficiency of public spending through greater fiscal transparency, and expanding and institutionalizing social protection for poor households and citizens.
“The Nigerian government has taken bold steps to stabilize the economy, and these efforts are beginning to yield results,” said Mr Mathew Verghis, World Bank Country Director for Nigeria. “But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians—especially the poor and vulnerable.”
Providing a forecast, Mr Samer Matta, the World Bank’s Senior Economist for Nigeria said the outlook for Nigeria’s economy remains cautiously optimistic.
Growth is projected to accelerate modestly from 4.2 per cent in 2025 to 4.4 per cent in 2027, driven by services and supported by agriculture and non-oil industry. Inflation is expected to gradually ease but remain elevated, requiring sustained monetary discipline and structural reforms to tackle food prices—”the biggest tax on the poor,” he said.