The World Bank has projected that Nigeria’s inflation rate will average 22.1% in 2025, as recent monetary policy measures begin to stabilize the economy and build investor confidence.
This projection was revealed in the newly released Nigeria Development Update (NDU) report titled “Building Momentum for Inclusive Growth”. The report, presented in Abuja, highlights ongoing improvements in Nigeria’s economic indicators but cautions that inflation remains a major concern.
While the Central Bank of Nigeria’s (CBN) firm monetary tightening is starting to moderate inflationary trends, underlying pressures persist—mainly driven by high energy and transport costs, the elimination of fuel subsidies, and disruptions in food supply chains.
According to the World Bank, although consumer prices remain high, the average inflation rate is expected to decline slightly in 2025 due to sustained policy discipline and increasing credibility in the CBN’s anti-inflation efforts.
Economic Gains Offer a Window for Reform
The report notes that Nigeria’s GDP expanded by 4.6% in the fourth quarter of 2024, bringing annual growth to 3.4%—the country’s best performance since the pre-pandemic era. Meanwhile, the budget deficit narrowed significantly from 5.4% of GDP in 2023 to 3.0% in 2024, bolstered by a dramatic rise in government revenues, which jumped from ₦16.8 trillion to ₦31.9 trillion.
Taimur Samad, Acting Country Director for the World Bank in Nigeria, emphasized that the country now has an important opportunity to channel more resources into areas such as healthcare, education, infrastructure, and social safety nets.
“With macroeconomic stability improving, Nigeria can redirect spending towards sectors that will close development gaps and benefit citizens directly,” Samad said.
Inclusive Growth Still Elusive
Despite robust growth in sectors like ICT and financial services, the report underscores that these industries do not create enough jobs for Nigeria’s rapidly growing population. Many people still lack the skills or access needed to participate in these expanding sectors.
Alex Sienaert, Lead Economist for the World Bank in Nigeria, advocated for a more dynamic role for the private sector in job creation and economic expansion.
“The government should focus on delivering essential public services while enabling private investment and innovation. Sustainable growth must come from the private sector,” Sienaert noted.
The Nigeria Development Update continues to serve as one of the World Bank’s key economic monitoring tools for the country, offering regular insights into fiscal performance, policy shifts, and development challenges.
