World Bank Reports Positive Shift in Nigeria’s Economy, Urges Inclusive Growth Strategy

The World Bank has reported a notable improvement in Nigeria’s macroeconomic situation, attributing it to a series of fiscal and monetary reforms implemented by the federal government. In its latest Nigeria Development Update (NDU) report titled “Building Momentum for Inclusive Growth,” the bank stated that Nigeria’s economy grew by 4.6% in the final quarter of 2024, pushing full-year growth to 3.4%—the highest since 2014, discounting the COVID-19 rebound years.

A key driver behind this growth is Nigeria’s enhanced fiscal discipline. According to the report, the country’s fiscal deficit narrowed significantly from 5.4% of GDP in 2023 to 3.0% in 2024. This was supported by a substantial rise in public revenues—from N16.8 trillion (7.2% of GDP) in 2023 to an estimated N31.9 trillion (11.5% of GDP) in 2024. The World Bank highlighted that this fiscal turnaround created space for more strategic public investment and stronger external buffers.

Taimur Samad, Acting World Bank Country Director for Nigeria, noted that the country now stands at a pivotal moment, with an opportunity to redirect spending toward critical development sectors. He emphasized that improved macroeconomic stability enables more effective public resource allocation, away from past inefficiencies and towards key areas like human capital development, infrastructure, and social protection.

Despite the growth momentum, the World Bank stressed the importance of rebalancing the economy to make growth more inclusive. Sectors such as finance and ICT have led recent GDP growth but have limited job-creation potential. Many Nigerians remain excluded due to a lack of skills and access. The report calls for a shift toward labor-intensive and productivity-driven sectors to ensure that economic benefits are widely shared.

Looking ahead, the World Bank reiterated that Nigeria’s aspiration to become a $1 trillion economy by 2030 hinges on inclusive policies and private sector-driven growth. Alex Sienaert, the Bank’s Lead Economist for Nigeria, emphasized a dual role for the government—strengthening basic services and infrastructure while enabling private enterprise to thrive. The report concludes by urging Nigeria to build on its current progress through bold reforms that address inequality and unlock long-term prosperity.

Source: Nairametrics