World Bank projects 3.6% economic growth for Nigeria
The World Bank
The World Bank has projected that Nigeria’s economy will grow by 3.6 per cent in 2025, building on an estimated expansion of 3.4 per cent in 2024, as key macroeconomic reforms begin to stabilise the business environment.
The bank also said Nigeria is now home to 15 per cent of the world’s extremely poor people, according to its latest Africa Pulse report released in April 2025.
The bank’s latest economic forecast, which is contained in the Spring 2025 edition of Africa’s Pulse, reflects a more optimistic view than that of the International Monetary Fund, which revised Nigeria’s 2025 growth rate downward to 3.0 per cent in its April 2025
According to the World Bank, the projected recovery is anchored on improved performance in non-oil sectors, notably financial services, telecommunications, information technology, and a gradual rebound in oil production, which is expected to align with Nigeria’s OPEC+ quota.
The multilateral lender anticipates that the country’s economic growth will further strengthen to 3.8 per cent by 2027, assuming current reforms are sustained.
The report stated, “Economic growth is expected to remain moderate in Nigeria. It is expected to increase from 3.4 per cent in 2024 to 3.6 per cent in 2025, and slightly increase to 3.8 per cent in 2026–27.
“The gradual recovery of the Nigerian economy along the forecast horizon is driven primarily by the service sector—specifically, finance, information and communications technology services, and transportation—and, to a lesser extent, a rebound in oil production that converges to its OPEC+ quota.”
In contrast, the IMF’s outlook remains cautious, citing persistent structural constraints and weaker oil receipts as key factors weighing down growth prospects.
The Fund projects that economic expansion will slow to 2.7 per cent in 2026.
On inflation, the World Bank projects that headline inflation will ease to 22.1 per cent in 2025, down from 26.6 per cent in 2024, with further moderation to 15.9 per cent by 2027. These forecasts are based on adjusted CPI figures following the rebasing exercise by the National Bureau of Statistics in January 2025.
The NBS had revised the base year of the Consumer Price Index from 2009 to 2024 to reflect current consumption patterns. As a result of the rebasing, inflation fell from 34.80 per cent in December 2024 to 24.48 per cent in January 2025, before rising slightly to 24.23 per cent in March, highlighting ongoing cost-of-living pressures.
However, the IMF offers a less optimistic outlook, projecting inflation to average 26.5 per cent in 2025 and spike to 37.0 per cent in 2026. The Fund attributes the stubborn inflation to structural inefficiencies, a weak supply response, and exchange rate volatility despite ongoing reforms.
The World Bank also identified the naira as one of Africa’s worst-performing currencies in 2024, having lost over 40 per cent of its value. The sharp depreciation followed the government’s decision to unify exchange rates and transition to a market-determined FX regime.
Despite the steep fall, the World Bank noted that recent reforms have improved FX liquidity and helped stabilise the naira in early 2025.
On the external front, Nigeria’s current account position is expected to remain strong. The World Bank projects that the current account surplus will rise slightly from 9.2 per cent of GDP in 2024 to 9.4 per cent in 2026. This outlook is underpinned by lower imports, increased remittances, and higher oil exports.
The IMF, however, forecasts a narrowing of the surplus to 6.9 per cent in 2025 and 5.2 per cent in 2026, warning that prolonged oil prices below Nigeria’s fiscal breakeven of $60 per barrel could undermine the external balance.
JP Morgan and Fitch Ratings have expressed mixed views, with the latter projecting a moderate surplus averaging 3.3 per cent of GDP over 2025–2026.
According to data from the Central Bank of Nigeria, the country recorded a balance of payments surplus of $6.83bn in 2024—its first in three years—driven by a goods trade surplus of $13.17bn.
Poverty level
The bank said Nigeria is now home to 15 per cent of the world’s extremely poor people. An analysis of its Africa Pulse report, unveiled during the Spring Meetings of the International Monetary Fund and the World Bank in Washington, DC, revealed that more than 106 million Nigerians currently live on less than $2.15 per day, the global benchmark for extreme poverty.
This places Nigeria at the centre of the global poverty crisis, despite being Africa’s largest economy by gross domestic product.
With sub-Saharan Africa accounting for 80 per cent of the world’s 695 million extremely poor people, Nigeria alone hosts approximately 15 per cent of that global figure based on an analysis of the figures provided by the Washington-based lender in its report.
The report read, “Sub-Saharan Africa has the highest extreme poverty rate globally, and a large share of the poor is concentrated in a few countries. About 80 per cent of the world’s estimated 695 million extreme poor resided in Sub-Saharan Africa in 2024, compared to 8 per cent in South Asia, 2 per cent in East Asia and the Pacific, 5 per cent in the Middle East and North Africa, and 3 per cent in Latin America and the Caribbean.
“Within Sub-Saharan Africa, half of the 560 million extreme poor in 2024 resided in four countries.”
Among the four countries, the report identified Nigeria as the single largest contributor to extreme poverty in the sub-Saharan Africa region, with about 19 per cent, followed by the Democratic Republic of Congo (14 per cent), Ethiopia (9 per cent), and Sudan (6 per cent).
This means that about 106.4 million of the 560 million extreme poor in Sub-Saharan Africa reside in Nigeria, which further accounts for 15 per cent of the global total.
It warned that poverty in resource-rich and fragile economies, such as Nigeria, would worsen unless decisive structural reforms are urgently implemented.
According to the Bank’s projections, Nigeria’s poverty rate is expected to increase by 3.6 percentage points between 2022 and 2027, despite temporary improvements in sectors such as telecommunications and financial services.
The report read, “Importantly, poverty in resource rich, fragile countries (which include large countries like the Democratic Republic of Congo and Nigeria) is expected to increase by 3.6 percentage points over 2022–27, being the only group in the region with increasing poverty rates.”
While other African countries have made strides in reducing poverty, particularly those with strong agricultural exports and more stable institutions, Nigeria continues to lag.
The World Bank added, “This finding calls for urgent improvement in service delivery in countries with rapidly expanding populations, such as the Democratic Republic of Congo and Nigeria.”
PwC estimates that 13 million more Nigerians could fall into poverty in 2025, further compounding the crisis. The Federal Government has rolled out a number of social intervention programmes in response to the crisis.
However, implementation of such programmes has been slow and often marred by corruption.
The International Monetary Fund earlier said that while the Nigerian government has taken important steps to stabilise the country’s economy, the impact of these reforms is yet to be felt by most citizens, as poverty and food insecurity remain high.
IMF made the observation in a statement issued at the end of its Article IV consultation mission to Nigeria, which was held between April 2 and 15, 2025.
In the statement, the IMF acknowledged that Nigerian authorities had taken bold fiscal and monetary measures in recent months, such as removing fuel subsidies, halting monetary financing of the fiscal deficit, and implementing reforms to improve the foreign exchange market.
However, it noted that the benefits of those policies had yet to trickle down to the wider population. “Gains have yet to benefit all Nigerians as poverty and food insecurity remain high,” the statement noted.
The Fund advised that fiscal savings from the removal of fuel subsidies should be channelled back into the budget to protect essential public investments.
It stressed the need to accelerate and expand the delivery of targeted cash transfers to Nigerians facing acute food insecurity under the World Bank-supported social protection programme.
“In particular, adjustments should protect critical, growth-enhancing investment, while accelerating and broadening the delivery of cash transfers under the World Bank-supported programme to provide relief to those experiencing food insecurity,” the statement read.
This came as the IMF pointed out that Nigeria is facing increased budgetary pressure as a result of falling global oil prices, adding to the country’s growing fiscal challenges.
The IMF’s Managing Director, Kristalina Georgieva, who made this known during a press briefing on the Fund’s 2025 Global Policy Agenda in Washington, D.C., on Thursday, said the drop in oil prices has placed oil-producing countries like Nigeria in a difficult position.
“Oil producers like Nigeria are under budget pressure due to lower oil prices,” Georgieva said. “On the other hand, oil importers may benefit. But broadly, slowing global growth will affect everyone, and we have already downgraded the continent’s growth prospects,” she stated.
