Nigeria’s economy is forecast to grow by 3.5% in 2025, driven by a robust services sector and declining inflation, says the World Bank

[dropcap]T[/dropcap]he World Bank has forecasted Nigeria’s economy to grow by 3.5% in 2025, with a slight rise to 3.7% in 2026, signalling a gradual recovery despite persistent economic challenges.

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This projection is outlined in the latest Global Economic Prospects report, which attributes the growth to improving domestic consumption and the resilience of the services sector, particularly financial and telecommunication services.

In 2024, Nigeria’s growth reached an estimated 3.3%, driven by macroeconomic and fiscal reforms that bolstered business confidence.

The elimination of the implicit foreign exchange subsidy, unification of exchange rates, and improved revenue administration contributed to narrowing the fiscal deficit.

Meanwhile, monetary policy tightening aimed at addressing rising inflation and a weakened naira played a key role in stabilising the economy.

The report highlighted that inflation is expected to decline gradually in 2025, supporting domestic consumption and strengthening the services sector, which remains the cornerstone of Nigeria’s economic growth.

Higher oil production is anticipated during this period, albeit below OPEC quotas, while overall regional growth in Sub-Saharan Africa, including contributions from South Africa’s improved electricity supply, is projected to average 4.0%.

However, the World Bank also warned of ongoing risks to Nigeria’s economic recovery, including inflationary pressures, fiscal vulnerabilities, a weak naira, and high debt-servicing costs.