Despite Soaring Inflation, Nigeria’s Economy Records Strong Growth, Says World Bank
Nigeria’s economy recorded its highest growth rate in over a decade in 2024, expanding by 3.4% despite persistent high inflation, according to a new World Bank report.
The growth, excluding the post-pandemic rebound, marks the country’s strongest economic performance since 2014.
The report attributes the surge to bold fiscal and economic reforms undertaken by President Bola Tinubu’s administration, which include the removal of costly petrol subsidies, reductions in electricity tariff subsidies, and the unification and devaluation of the naira.
These measures, while unpopular, have significantly boosted public revenues and helped narrow the nation’s fiscal deficit.
Government revenue jumped from ₦16.8 trillion in 2023 (7.2% of GDP) to ₦31.9 trillion in 2024 (11.5% of GDP), while the fiscal deficit shrank from 5.4% to 3.0% of GDP. “Nigeria is building momentum for inclusive growth,” said the World Bank, emphasizing the long-term potential of these reforms to strengthen the country’s economic foundation.
However, inflation remains a pressing concern. Consumer prices soared to over 30% in early 2024, fueled by subsidy removals and exchange rate adjustments. The Central Bank of Nigeria has responded with aggressive monetary tightening, raising its benchmark policy rate to 27.5% by February 2025 in a bid to control inflationary pressures.
The World Bank projects inflation will moderate to an average of 22.1% in 2025 as monetary and fiscal policies gain credibility. Despite the economic hardships faced by many Nigerians, especially in the wake of rising food and transport costs, the Bank maintains a cautiously optimistic outlook.
Looking ahead, Nigeria’s GDP is expected to grow by 3.6% in 2025. The World Bank urges the government to maintain policy discipline and sustain reforms, warning that any reversal could undermine recent gains.
“The current path offers a real opportunity to rebuild fiscal space, reduce poverty, and stimulate job creation,” the Bank stated.
The report underscores the delicate balance Nigeria faces sustaining reforms to ensure long-term stability while cushioning vulnerable populations from economic shocks.
