The World Bank has expressed glowing accolades for the economic reforms embarked upon by the administration of President Bola Ahmed Tinubu.
In its Nigeria Development Update (NDU) released last Monday with the title: “Building momentum for inclusive growth”, the bank said that the reforms have restored stability to Nigeria’s economy.
The World Bank backed its argument with solid data. According to the report, economic growth for the fourth quarter of 2024 surged to 4.6 per cent (year-on-year), thus pushing growth for the full year of 2024 to 3.4 per cent.
The bank noted that the growth for that period was the highest since 2014.The reforms by the Tinubu administration have strengthened the country’s foreign exchange market. They have also helped to improve Nigeria’s foreign reserves.
The country’s foreign reserves had for decades remained at $32 billion. However, it leisurely crossed the $40 billion mark in November 2024 due to the current reforms.
The World Bank report also noted that the reforms have engendered tremendous revenue surge. Consequently, fiscal deficit dropped from 5.4 per cent of gross domestic product (GDP) in 2023 to three per cent in 2024. The reforms spurred a sharp increase in revenue of the entire federation.
Revenue rose from N16.8 trillion (7.2 per cent of GDP) in 2023 to N31.9 trillion (11.5 per cent of GDP) in 2024. The increase in federal government revenue is very glaring. Before the withdrawal of petrol subsidy on May 29, 2023, the three tiers of government was sharing an average of N600 billion monthly from the federation account. Now with the massive improvement in government revenue enhanced by the subsidy removal, the three tiers of government shares anything from N1.4 trillion monthly from the federation account.
The World Bank however expressed fears about the spiraling inflation in the economy but was optimistic that inflation will drop to an annual average of 22.1 per cent in 2025. Nigeria’s inflation is already following the trend predicted by the World Bank. Figures released by the National Bureau of Statistics (NBS) showed inflation dropping to 23.71 per cent in April compared to 24.23 per cent in March. What really impressed many in the inflation figure from NBS is the rate of food inflation. The figure dropped to 21.26 in April 2025.
The price of a 50kg bag of rice has tumbled from N123,100 in December 2024 to a record N58,000 in April 2025. The federal government conjured the dramatic drop in the price of rice by leveraging the excess supply in the global rice market and importing cheap foreign rice at zero import tariffs to supplement what is produced in Nigeria.
The World Bank predicates its projections on lower inflation rates in Nigeria in 2025 on the conviction that the Central Bank of Nigeria (CBN) will sustain its tight stance on monetary policy to tame inflation.
It however noted that since the reforms have restored stability to Nigeria’s economy, the federal government should consolidate macroeconomic stability and ignite inclusive growth through deeper, wider structural reforms. The bank listed electricity and transport systems as areas needing prompt attention. Nigeria’s crippled rail system is blamed for the supply chain deficiency that fuels inflation.
“There is need for the economy to generate more and better jobs at scale and reduce poverty”, the NDU noted.
In his comment on the NDU, Talmur Samad, the World Bank country director for Nigeria, said that Nigeria was gradually restoring macroeconomic stability that would eventually drive growth.
“With the improvement in the fiscal situation, Nigeria now has the historic opportunity to improve the quality and quantity of development spending, investing more in human capital, social protection and infrastructure”, said Samad.
The call for investment in social protection reiterates an earlier comment by the World Bank that the absence of a social security system was responsible for the high poverty rate in Nigeria.
Blueprint’s view on the issue tallies with that of the World Bank. We therefore join the World Bank in calling on the federal government to set up a social security system as a matter of urgency.
Like we said in our editorial last month with the title: “The 2030 $1 trillion economy target”, the World Bank enjoined the federal government to engender accelerated growth and poverty reduction if Nigeria must become a $1 trillion economy by 2030 as envisioned by the current administration.
Like this newspaper, the World Bank believes that the $1 trillion economy by 2030 target is attainable. It however advocates that government must tackle poverty and slow economic growth to attain it.
The World Bank also shared our view that the finance and ICT sectors now driving economic growth lack the capacity for massive job creation.
We therefore join the World Bank in calling on the federal government to empower the productive sectors of the economy to drive economic growth.