The economic reforms embarked upon by the President Bola Tinubu administration, has started yielding fruits, so says the World Bank.
This is captured in the current Nigeria Development Update (NDU) released in Abuja, which assessed the nation’s macroeconomic performance and outlook amid global uncertainty connected to the conflict in the Middle East.
The Bretton Woods institution stated that Nigeria’s economy has strengthened on the back of stabilisation reforms, with growth remaining steady and key macroeconomic indicators improving.
According to the report, Nigeria’s real gross domestic product (GDP) grew by 4.0 percent in 2025, following a 4.1 percent expansion in 2024, driven largely by the services sector, particularly ICT, financial services, and real estate.
The bank further said that early 2026 indicators suggest continued growth across sectors, despite a slight slowdown triggered by global tensions.
“Inflation fell to 15.1 percent year-on-year in February 2026, down from 26.3 percent a year earlier,” the report said.
“Food inflation also declined sharply to 12.1 percent, easing pressure on household incomes, especially for poorer Nigerians.”
The World Bank however warned that the positives remain fragile, as growing global energy and commodity prices, driven by the Middle East crisis, are beginning to reverse some of the progress.
“Inflation has declined substantially, but it remains in double digits and the Middle East conflict is adding renewed pressures, ” World Bank said.
The report said petrol prices rose by 45 percent between February and March, while diesel prices nearly doubled to about N1,800 per litre, posing fresh risks to inflation and living costs.
It added that external reserves also improved, with net reserves rising to $34.8 billion and gross reserves reaching $45.5 billion — equivalent to 8.7 months of import cover.
“Nigeria’s fiscal deficit widened slightly in 2025, as the continued surge in non-oil revenues was largely absorbed by increased state-level capital spending and higher federal recurrent spending,” said the bank.
On fiscal performance, the report said Nigeria’s deficit grew slightly to 3.1 percent of GDP in 2025, up from 2.8 percent in 2024, despite stronger collections from non-oil revenue.
On what lies ahead, World Bank projected that the economy of Nigeria would grow at a modest rate, to about 4.2 percent between 2026 and 2028, supported by ongoing reforms, improved macroeconomic stability, and increased investment.
