Nigeria’s Economy Expands 3.9% in H1 2025 as World Bank Forecasts 4.4% Growth — But Living Standards Lag Behind
Nigeria’s economy recorded a robust 3.9% growth in the first half of 2025, signaling the positive effects of President Bola Tinubu’s ongoing economic reforms, according to the latest Nigeria Development Update (NDU) released by the World Bank. The report, titled “From Policy to People: Bringing the Reform Gains Home,” commended the government’s efforts in stabilizing the macroeconomic environment through exchange rate unification, fuel subsidy removal, and tighter monetary policies. However, it cautioned that these gains have yet to meaningfully improve the daily lives of millions of Nigerians struggling with rising inflation, food insecurity, and poverty.
According to the World Bank, the 3.9% growth marks an improvement from the 3.5% recorded in the same period of 2024, largely driven by the services and non-oil sectors, along with moderate growth in agriculture and oil production. The report also highlighted stronger external performance, with foreign reserves surpassing $42 billion and a current account surplus climbing to 6.1% of GDP, boosted by higher non-oil exports and reduced oil imports. On the fiscal side, Nigeria’s public debt is projected to decline from 42.9% to 39.8% of GDP, the first drop in over a decade, reflecting tighter fiscal discipline and improved revenue mobilization.
Despite these macroeconomic improvements, the World Bank warned that the benefits have not reached the average Nigerian household. Food inflation remains the country’s biggest challenge, with poor families spending up to 70% of their income on food. The report revealed that the cost of a basic food basket has risen fivefold between 2019 and 2024, worsening living conditions and eroding purchasing power. “Macroeconomic stability alone is not enough,” said Mathew Verghis, World Bank Country Director for Nigeria. “The true test of these reforms will be how they improve the daily lives of ordinary Nigerians—especially the poor and vulnerable.”
To make economic gains more inclusive, the World Bank urged Nigeria to prioritize three key areas: tackling food inflation, improving fiscal transparency, and expanding social protection. It called for the removal of trade barriers and import restrictions to reduce food prices, while addressing deeper issues such as insecurity, poor logistics, and weak agricultural productivity. The Bank also recommended the creation of a national fiscal pact to align public spending with development priorities in health, education, and infrastructure, as well as the institutionalization of cash transfers and safety nets for the most vulnerable groups.
Looking ahead, the World Bank projects Nigeria’s economy to grow by 4.2% in 2025, rising slightly to 4.4% by 2027, driven by continued expansion in services, agriculture, and non-oil sectors. However, it warned that sustaining this growth depends on the government’s commitment to policy consistency, transparency, and human capital investment. The Bank concluded that while Nigeria’s reforms are beginning to yield results, the next phase must focus on translating economic progress into real improvements in living standards, restoring public confidence, and ensuring that reform dividends reach all citizens.
source: Leadership