Amidst ongoing economic challenges and global uncertainties, Nigeria’s Economy is projected to grow by 3.5 percent in 2025, with a slight improvement to 3.7 percent in 2026, according to the World Bank’s latest Global Economic Prospects report. This modest recovery is attributed to key economic reforms and sectoral growth. Last year, the Economy saw an estimated growth of 3.3 percent, primarily driven by robust activity in the services sector, mainly financial and Telecommunication services. These gains were supported by macroeconomic and fiscal reforms that stimulated business confidence.
In addition, the unification of the exchange rate and enhanced Revenue administration contributed to a revenue surge, narrowing the fiscal deficit. Monetary tightening measures by The Central Bank of Nigeria (CBN) also significantly addressed rising Inflation and stabilised the local currency. Meanwhile, the tightening of the Monetary Policy measures implemented in 2024 is anticipated to yield positive outcomes, enhance domestic consumption, and reinforce development in the services sector. This sector remains a key driver of economic activity, supported by increased demand for financial and telecommunication services.
Oil production levels are predicted to stay below the OPEC quota.
While the oil sector is expected to experience modest growth over the forecast period, production levels are predicted to stay below the OPEC quota. This limitation underscores the need for diversified growth strategies beyond oil dependency. The report further highlights that per capita income growth in the country will likely remain weak during the forecast horizon, necessitating substantial Structural Reforms to address underlying economic vulnerabilities. The analysis indicated that the country’s economic performance raised the regional growth average for Sub-Saharan Africa to 2.2 percent in 2024. However, the rest of the region performed better, with 4.0 percent during the same timeframe.
Despite having the largest economy and population in Sub-Saharan Africa, the nation’s impact on the regional economy remains limited. The World Bank’s analysis reveals that the region is a modest market for exports from other Sub-Saharan African nations. Additionally, its contribution to regional Foreign Direct Investment (FDI) and remittance flows is minimal. Nigerian banks, however, have established a regional presence, indicating potential avenues for strengthening economic ties within the continent. Nigeria must address structural bottlenecks that hinder regional Trade and investment linkages to leverage its economic size fully.
Focus on inflation and global economic recovery trends.
Globally, the report anticipates a steady annual growth rate of 2.7 percent between 2025 and 2026, driven by easing inflation and supportive monetary policies in advanced and emerging economies. This stabilisation is expected to promote moderate global expansion, with improved trade and investment flows contributing to a more favourable economic environment. For the country, declining inflation is projected to enhance purchasing power, thereby supporting domestic demand and consumption. This development is crucial for sustaining growth in the services sector, which continues to underpin the nation’s economic trajectory.
However, persistent inflationary pressures, a weak currency, and high debt-servicing costs pose risks to this recovery. To achieve sustainable economic growth, the country must deepen structural reforms to enhance Productivity and economic resilience. This report underscores the importance of addressing fiscal vulnerabilities, such as insufficient fiscal buffers and reliance on oil revenues. Reforms that boost non-oil revenue generation, improve public financial management and promoting private-sector investments are vital for long-term stability. Moreover, prioritising Infrastructure development, particularly in transportation, energy, and digital connectivity, can unlock significant economic potential.
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For better results, the national economic journey cannot be viewed in isolation. Regional and global interdependencies necessitate collaborative efforts to address shared challenges and leverage opportunities. For example, economic linkages through migration and remittances illustrate the potential of regional cooperation within the Middle East and North Africa region. For Sub-Saharan Africa, the nation’s leadership in promoting regional integration and trade could have transformative effects. Nevertheless, the projections provide a roadmap for national economic recovery and development.