Nigeria has made notable progress in stabilizing its economy through recent policy reforms but must do more to raise living standards and address surging food prices, the World Bank said in a report released on Wednesday.
According to Reuters, the report highlighted improvements in economic growth, revenue generation, and external balances following key government actions such as the removal of the fuel subsidy, the devaluation of the naira, and tax reforms.
However, it cautioned that high food inflation and widespread poverty continue to burden households across the country.
Africa’s most populous nation recorded a 3.9% year-on-year economic growth in the first half of 2025, compared with 3.5% during the same period in 2024. Growth was driven by strong performance in the services and non-oil sectors, as well as a recovery in oil production and agriculture.
The report noted that foreign reserves rose above $42 billion, while the current account surplus expanded to 6.1% of GDP, supported by higher non-oil exports and a reduction in oil imports.
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Despite weaker oil prices, Nigeria’s fiscal deficit is projected at 2.6% of GDP in 2025, remaining largely unchanged from 2024. Public debt is expected to decline for the first time in more than a decade, falling from 42.9% to 39.8% of GDP.
“The Nigerian government has taken bold steps to stabilize the economy, and these efforts are beginning to yield results,” said Mathew Verghis, World Bank Country Director for Nigeria.
“The true measure of success will be how these reforms improve the daily lives of Nigerians, especially the poor and vulnerable.”
According to the report, the cost of a basic food basket has increased fivefold since 2019, hitting low-income households hardest, as many spend up to 70% of their income on food.
The World Bank urged urgent action in three key areas: removing trade barriers and fixing supply chain constraints to curb food inflation; improving fiscal transparency and aligning public spending with development priorities; and expanding social protection programs through regular, domestically financed cash transfers and crisis-responsive safety nets.
Looking ahead, the World Bank projects that Nigeria’s economy will grow by 4.2% in 2025 and reach 4.4% by 2027, driven mainly by services and supported by agriculture and non-oil industries.
Inflation is expected to decline gradually but remain relatively high. “Food inflation is the biggest tax on the poor,” said Samer Matta, the World Bank’s Senior Economist for Nigeria.
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