Nigeria’s economy to grow by 3.5% in 2025, 3.7% in 2026 – World Bank
By Taiwo Osho
In its recent economic forecast, the World Bank has projected Nigeria’s economy to grow by 3.5% in 2025, with a slight improvement to 3.7% in 2026. This growth is expected to be driven by increased activity in the services sector and gradual improvements in macroeconomic stability.
Stating this in its latest Global Economic Prospects report, the World Bank pointed out a steady but cautious recovery for Nigeria, despite facing both domestic and international challenges.
The report estimated that Nigeria’s economy grew by 3.3% in 2024, primarily fueled by robust performance in the services sector, particularly financial and telecommunication services. Reforms implemented in 2024 aimed at improving macroeconomic and fiscal conditions were credited with boosting business confidence.
According to the report, “In Nigeria, growth increased to an estimated 3.3% in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services. Macroeconomic and fiscal reforms helped improve business confidence.”
Additionally, the Central Bank of Nigeria tightened monetary policy in response to rising inflation and a depreciating naira. Fiscal adjustments, including the removal of the implicit foreign exchange subsidy through exchange rate unification and improved revenue administration, also contributed to narrowing the fiscal deficit.
Outlook for 2025-2026: Drivers and Challenges
The World Bank’s forecasts for 2025 and 2026 anticipate a rebound in consumer spending as inflation gradually eases, thanks to earlier monetary policy tightening. The services sector is expected to remain the dominant growth driver, while oil production is projected to increase moderately but stay below Nigeria’s OPEC production quota.
The report further stated, “Growth in Nigeria is forecast to strengthen to an average of 3.6% a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector. Oil production is expected to increase over the forecast period but remains below the OPEC quota. The baseline forecast implies that per capita income growth will remain weak over the forecast horizon.”
However, the World Bank cautioned that structural challenges could hinder sustained recovery. Persistent inflationary pressures, a weak currency, and underwhelming oil production remain significant obstacles. Rising debt-servicing costs and limited fiscal buffers further complicate the country’s economic outlook.
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