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The World Bank anticipates that Nigeria’s per capita income will return to pre-pandemic levels by 2025, reflecting a gradual improvement in the country’s economy in the coming years.
The Sub-Saharan African (SSA) region, including Nigeria, experienced an economic growth slowdown to an estimated 2.9% in 2023, influenced by country-specific challenges, including higher input prices for businesses in Nigeria.
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Nigeria’s economic growth softened to an estimated 2.9% in 2023, impacted by factors such as weakened services growth due to a disruptive currency demonetization policy. However, annual oil production saw an increase after previous years’ decline.
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Looking ahead, the World Bank projects Nigeria’s economic growth at 3.3% for 2024 and 3.7% for 2025, driven by macro-fiscal reforms initiated by the government, including the removal of the gasoline subsidy and unifying the exchange rate. Sectors such as agriculture, construction, services, and trade are expected to contribute to this growth.
Inflation is projected to ease gradually as the effects of last year’s exchange rate reforms and the removal of fuel subsidies diminish.
The report emphasizes that per capita income is expected to reach its pre-pandemic level only in 2025. The recovery is contingent on the successful implementation and continuation of the current reform momentum. The World Bank underscores the importance of maintaining the reform momentum and consolidating fiscal and monetary policies to enhance growth prospects.
While the report is optimistic about Nigeria’s economic recovery, it also acknowledges risks, including high inflation and the need for further economic reforms.
The World Bank’s projections align with a similar outlook by an analyst at Morgan Stanley, emphasizing the potential for increased annual income due to the reforms implemented by President Bola Tinubu. The success of these reforms will be crucial for Nigeria’s economic growth in the medium term, with an average annual growth rate of 3.5% expected during 2023–2026.
