By Juliet Awilo
Nigeria’s Gross Domestic Product (GDP) is anticipated to grow by an average of 3.6% in 2025-2026, according to the World Bank’s latest Global Economic Prospects report for Sub-Saharan Africa (SSA). This projection follows an estimated growth of 3.3% in 2024, largely driven by advancements in the services sector, particularly in financial and telecommunications services.
The report notes that recent macroeconomic and fiscal reforms have significantly bolstered business confidence. In response to rising inflation and a weakening naira, the Central Bank of Nigeria has tightened monetary policy; meanwhile, the fiscal deficit has narrowed, buoyed by increased revenues stemming from the removal of the implicit foreign exchange subsidy after the unification of the exchange rate and enhancements in revenue administration.
Despite these promising developments, the report cautions that inflation rates are projected to gradually decline, which could enhance consumption and further support growth in the dominant services sector. Nevertheless, oil production is expected to increase during this period, though it will likely remain below the OPEC quota.
The report indicates that economic growth in Sub-Saharan Africa improved from 2.9% in 2023 to an estimated 3.2% in 2024. This adjustment reflects specific country challenges, including ongoing conflicts in Sudan. Forecasts suggest that regional growth could strengthen to an average of 4.2% in 2025-2026, largely due to better prospects for industrial-commodity-exporting countries, including Nigeria and South Africa.
However, the report warns that high government debt and elevated interest rates continue to constrict fiscal space, prompting many countries to pursue fiscal consolidation efforts amidst sustained high financing needs. While growth rates are projected to rise, per capita income growth is expected to remain insufficient to make significant strides in alleviating extreme poverty across the region.
The report also outlines potential risks, including a slowdown in global growth, trade policy shifts, and heightened instability in regions such as the Middle East and Sudan, which could exacerbate energy and food price inflation.
In conclusion, the World Bank’s findings suggest cautious optimism for Nigeria’s economic landscape, emphasizing the importance of continued structural reforms and investments in key sectors to foster sustainable growth going forward.
