Nigeria's economic outlook is showing signs of improvement due to ongoing reforms, as detailed in the latest Nigeria Development Update (NDU) report. The report, titled "Building Momentum for Inclusive Growth," indicates that the country's economic growth reached 4.6% year-on-year in the last quarter of 2024, leading to an overall growth rate of 3.4% for the year. This marks the highest growth since 2014, excluding the COVID-19 rebound period.
The report attributes these positive developments to recent reforms that have strengthened both the foreign exchange market and Nigeria’s external position. Additionally, there has been a notable improvement in the fiscal deficit, which decreased from 5.4% of GDP in 2023 to 3.0% in 2024. This was driven by a significant rise in revenues across the Federation, from N16.8 trillion in 2023 to an estimated N31.9 trillion in 2024.
Despite these gains, inflation remains high but is projected to decrease to an annual average of 22.1% in 2025. The report suggests that further structural reforms are necessary to consolidate macroeconomic stability and foster inclusive growth, with a focus on job creation and poverty reduction.
Taimur Samad, Acting World Bank Country Director for Nigeria, stated: “Nigeria has made impressive strides to restore macroeconomic stability... investing more in human capital, social protection, and infrastructure."
The NDU emphasizes that achieving a US$1 trillion economy by 2030 requires accelerating growth and rebalancing it towards productive sectors that create jobs and opportunities for all Nigerians. Currently, sectors like finance and ICT drive growth but do not offer mass employment opportunities due to skill gaps.
A private sector-led strategy supported by public sector facilitation is recommended to enhance inclusive growth. Key strategies include addressing infrastructure deficits, fostering competition and market openness, improving business environments, enhancing access to finance for firms, and reforming policies in key sectors.
Alex Sienaert, World Bank Lead Economist for Nigeria remarked: “International experience suggests that the public sector cannot sustainably generate growth and jobs by itself... A useful strategy is to position the public sector... as an enabler for the private sector."