Nigeria’s economy improves due to reforms – World Bank

Taimur Samad, director of the interim country of the World Bank for Nigeria, said that the Nigerian economy is improving due to the country’s commitment for supported reforms.

Samad made this declaration on the basis of the latest Nigeria Swan Update (NDU) report, entitled “Building Momentum for Inclusive Growth”, published on Monday in Abuja, which highlighted several key indicators of progress.

He said they include a stable exchange rate, the increase in foreign reserves and improved tax conditions.

He said that the improvements in the tax conditions were mainly guided by an increase in the federation’s revenue, which contributed to the positive economic prospects for the country.

Samad said that economic growth in the last quarter of 2024 had increased to 4.6 percent on an annual basis, bringing growth for the whole year for 2024 to 3.4 percent, the highest since 2014, excluding the rebound of 2021-2022 Covid-19.

“In addition, the tax deficit was reduced by 5.4 percent of the gross domestic product (GDP) in 2023 to 3.0 percent of the gross domestic product (GDP) in 2024.

“This positive trend has been led by a strong increase in the federation’s revenue, which increased by N16.8 trillion in 2023, 7.2 percent of GDP to a N31.9 trillion estimated in 2024, 11.5 percent of the GDP.”

Despite these earnings, Samad stressed that many challenges remained, including persistent high inflation.

He underlined the importance of the central bank of Nigeria which maintains close monetary policies to guarantee continuous economic stability.

In case of success, it provided that the inflation descended to just over 22 % on an annual average by 2025, marking an important result.

The report also stressed that remaining the course on macro-instant reforms would offer the opportunity to encourage the growth of the private sector and create jobs for the Nigerians.

“However, it was clear that supported momentum and further reforms are needed to guide growth and expand economic opportunities”.

Alex Sienaert, the main economist of the World Bank for Nigeria, provided further insights, underlining the need for careful monitoring of revenue gains from removing the subsidy for fuel and warning from excessively ambitious budget projections for 2025.

He also underlined the importance of downsizing the targeted cash transfer program to assist vulnerable populations.

Sienaert has outlined several steps to achieve macroeconomic stability, including the reduction of the cost of governance and the acceleration of the rhythm of economic growth.

He asked for a private sector growth strategy, led by the public sector, to fill the critical gaps for infrastructure, in particular in electricity and transport, while promoting a competitive and open commercial environment.

In addition, he underlined the improvement of access to finance and policies to help new and existing companies to grow, increase productivity and trigger the potential of the key sectors.

The Ndu is a binnial bandwidth that evaluates economic and social developments in Nigeria and offers a thorough analysis of the medium -term development challenges of the country.