According to World Bank projections, Nigeria’s per capita income is expected to reach its pre-pandemic level by 2025.
The growth forecast for Nigeria is at 3.3% for the current year and 3.7% in 2025, reflecting an increase of 0.3 and 0.6 percentage points, respectively, since June.
The report attributes this growth to macro-fiscal reforms gradually bearing fruit, with a prediction that per capita income will return to its pre-pandemic level in 2025.
The key drivers of growth are expected to be agriculture, construction, services, and trade. The report also anticipates a gradual easing of inflation as the effects of last year’s exchange rate reforms and the removal of fuel subsidies diminish.
The World Bank’s January 2024 Global Economic Prospects report suggests a gradual improvement in Nigeria’s economy over the next few years. In the Sub-Saharan African region, which includes Nigeria, economic growth is projected to slow down to 2.9% in 2023, mainly due to factors specific to Nigeria, such as increased input costs for businesses.
The growth rates of the three largest economies in the region—Angola, South Africa, and Nigeria—averaged 1.8% in 2023. Nigeria’s growth in 2023 was lower than expected, reaching 2.9%, impacted by issues like the disruption caused by a currency demonetization strategy, leading to a slowdown in services growth. However, an increase in yearly oil output contributed to the improvement in Nigeria’s GDP, with expectations for growth at 3.3% and 3.7% in 2024 and 2025, respectively.
The World Bank emphasizes the importance of maintaining the pace of reforms and unifying monetary and fiscal policy to enhance economic prospects. Key measures, such as the removal of fuel subsidies and the unification of the currency rate, are seen as essential for long-term economic stability and growth, despite posing temporary challenges. Industries like commerce, services, construction, and agriculture are expected to drive growth in the coming years, while inflation is predicted to progressively decrease as the impact of previous reforms wears off.