In a surprising shift that sets it apart from the International Monetary Fund (IMF), the World Bank has expressed growing confidence in Nigeria’s economic resilience, raising its 2025 growth projection for Africa’s largest economy to 3.6%, up from an earlier estimate of 3.5% made in January. The upward revision, released in the latest edition of the World Bank’s Global Economic Prospects report, signals renewed optimism about Nigeria’s economic direction amid global uncertainties.
This latest forecast marks a 10-basis-point improvement from previous projections and suggests Nigeria’s economy will outperform its 2024 growth of 3.4%. More significantly, it contrasts with the IMF’s more conservative April forecast, which pegged Nigeria’s GDP growth at just 3.0%, citing global trade instability and concerns about crude oil market volatility—Nigeria’s major foreign exchange earner.
The World Bank’s optimism comes at a time when the global economy is teetering on the edge of stagnation. Outside of official recessions, 2025 is expected to register the slowest global growth since the 2008 financial crisis, with a worldwide average of just 2.3%. In stark contrast, Nigeria is projected to not only exceed this global average but also nearly match Sub-Saharan Africa’s regional growth projection of 3.7% for the year.
South Africa, Nigeria’s continental economic rival, is expected to grow by a paltry 0.7% this year, underscoring Nigeria’s relative economic dynamism. By 2027, Nigeria’s growth rate is projected to climb steadily to 3.8%, further widening the regional growth gap.
The World Bank credits Nigeria’s positive trajectory to several domestic factors, particularly strong performances in the telecommunications and financial services sectors, which powered the 2024 GDP expansion. However, the report also acknowledges that growth remains non-inclusive, as these sectors are less labor-intensive and do not significantly alleviate widespread unemployment or poverty.
Additionally, Nigeria’s fiscal environment has strengthened due to the removal of the foreign exchange subsidy, improved tax and revenue administration, better-performing state revenues, and increased remittances from government-owned enterprises. These developments have bolstered the country’s financial position even as inflation remains elevated and above the Central Bank of Nigeria’s (CBN) targets.
“Although inflation has cooled somewhat in recent months, it remains elevated relative to the central bank target and pre-pandemic trends,” the World Bank noted in its country-specific commentary. Nonetheless, the bank cited Nigeria among a group of large energy-exporting emerging markets, including Russia and Saudi Arabia, that are poised for upward momentum driven by domestic reforms and diversification efforts beyond oil exports.
While the 3.6% growth forecast is encouraging, it remains insufficient to propel Nigeria toward the ambitious $1 trillion GDP goal outlined by President Bola Tinubu’s administration. As previously reported by The Guardian, Nigeria would need to maintain a 17% nominal growth rate annually for over a decade to achieve this benchmark—a scenario that appears unrealistic under current growth conditions.
The World Bank’s report also hints at a reshaping of regional leadership within Africa’s economic landscape. As South Africa grapples with structural challenges, including energy insecurity and political instability, Nigeria’s relative macroeconomic stability and reform-driven growth could reassert its role as the regional economic powerhouse.
However, the global outlook remains fragile. Heightened trade tensions, mounting debt burdens, and persistent policy uncertainty have forced the World Bank to downgrade growth forecasts for nearly 70% of economies across all income levels. Although a global recession is not anticipated, the report warns that if current projections hold, the 2020s could become the slowest-growth decade since the 1960s.
Nigeria’s economic performance, buoyed by reforms and structural shifts, is gaining positive attention from global financial institutions like the World Bank—even as others, like the IMF, remain cautious. If the government can sustain the momentum and expand growth into more inclusive sectors like agriculture and manufacturing, the country may be on course for broader economic stability and long-term prosperity.
Still, bridging the gap between GDP growth and improved living standards remains Nigeria’s most urgent task. The real test for policymakers is ensuring that the gains recorded in macroeconomic figures translate into better livelihoods for ordinary Nigerians.