World Bank Projects 3.6% Growth for Nigeria in 2025 Amid Reform Push and Global Headwinds

The World Bank has projected Nigeria’s economy to grow by 3.6% in 2025, slightly up from earlier estimates, citing tentative gains from ongoing economic reforms but warning of persistent structural challenges that could undermine momentum. The forecast was contained in the Bank’s latest Global Economic Prospects report, released this week, which also revised growth expectations for Sub-Saharan Africa and other emerging markets.

Cautious Optimism Amid Domestic Reforms

The World Bank attributes Nigeria’s modest projected growth to the government’s fiscal and monetary reforms, particularly efforts to unify the exchange rate, reduce fuel subsidies, and improve non-oil revenue generation. These reforms, though painful in the short term, are seen as necessary steps to restore macroeconomic stability and rebuild investor confidence. “Nigeria’s growth will benefit from recent reforms aimed at stabilising the exchange rate regime, boosting tax revenues, and attracting investment,” the report noted. However, it also emphasised that the full benefits of these policy adjustments may take time to materialise, particularly as the country continues to grapple with inflation, insecurity, and infrastructure deficits.

Inflation and Living Costs Remain Pressing Concerns

Despite the optimistic projection, the World Bank was quick to highlight key risks facing the Nigerian economy. Chief among them is inflation, which has remained stubbornly high, driven by food prices, energy costs, and currency depreciation. These price pressures continue to erode household incomes and disproportionately impact the country’s most vulnerable populations. The report also flagged Nigeria’s sluggish private sector growth, limited access to credit, and high youth unemployment as barriers to inclusive development. While the oil sector is expected to contribute to growth in 2025, the Bank stressed the need to diversify away from hydrocarbons and invest more aggressively in manufacturing, agriculture, and digital services.

Global Context: A Mixed Outlook for Sub-Saharan Africa

The World Bank revised Sub-Saharan Africa’s average growth forecast to 3.9% for 2025, citing improved commodity prices and easing global inflation. Nigeria’s projected 3.6% growth, while slightly below the regional average, reflects its larger economic base and the unique set of domestic challenges it faces. Rising debt levels across African economies, combined with tighter global financial conditions, are also expected to limit fiscal space in many countries, including Nigeria. The report urged policymakers to prioritise structural reforms, improve transparency in public spending, and create enabling environments for the private sector to thrive.

Policy Consistency Key to Sustained Recovery

Economic experts and development analysts say Nigeria’s ability to meet or exceed the 3.6% growth target will depend heavily on policy consistency and the political will to implement hard reforms. While the government has made progress in reining in certain fiscal leakages, concerns remain over the slow pace of institutional reform and regulatory bottlenecks. Speaking in response to the report, a senior official at Nigeria’s Ministry of Finance stated that the government remains committed to “building a resilient economy that can deliver inclusive growth and job creation.” The official added that a coordinated effort involving states, private sector players, and international partners would be essential in delivering sustainable development. As 2025 approaches, the World Bank’s forecast offers a measure of hope but also a challenge for Africa’s largest economy to stay the course on reform and resilience in a rapidly evolving global economic landscape.