FRI JAN 17 2025-theGBJournal| Growth in Nigeria is forecast to strengthen to an average of 3.6 percent a year in 2025-26, says the World Bank in its latest Global Economic Prospect report.
According to the report, inflation is projected to gradually decline, following monetary policy tightening in 2024, boosting consumption and supporting growth in the services sector, which continues to be the main driver of growth.
Oil production is expected to increase over the forecast period but remain below the OPEC quota. The baseline forecast implies that per capita income growth will remain weak over the forecast horizon.
Growth increased to an estimated 3.3 percent in 2024 in Nigeria, mainly driven by services sector activity, particularly in financial and telecommunication services. Macroeconomic and fiscal reforms helped improve business confidence.
In response to rising inflation and a weak naira, the Central Bank of Nigeria (CBN) tightened monetary policy.
Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration.
Meanwhile, the Bank projects Growth in sub-Saharan Africa to firm to 4.1% in 2025 and 4.3 percent in 2026, as financial conditions ease alongside further declines in inflation.
Following weaker-than-expected regional growth last year, the World Bank reversed growth projections for 2025 upward by 0.2 percentage point, and for 2026 by 0.3 percentage point, with improvements seen across various subgroups.
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