Nigeria’s ongoing macroeconomic and structural reforms have begun to significantly alter the fiscal landscape, with government revenue jumping to N31.9tn in 2024, according to the World Bank’s latest Nigeria Development Update report released on Monday.
Titled “Building Momentum for Inclusive Growth,” the report highlights key gains attributed to policy reforms introduced by the Tinubu administration, particularly in foreign exchange and fiscal management. It states that the country’s consolidated fiscal deficit fell sharply from 5.4 per cent of GDP in 2023 to 3.0 per cent in 2024, driven by a 90 per cent surge in revenue from N16.8tn to N31.9tn.
“Reforms in the foreign exchange market and tighter fiscal controls are beginning to yield measurable results,” the report stated. “Government revenue rose significantly, boosting Nigeria’s ability to finance development priorities.”
The World Bank’s acting Country Director for Nigeria, Taimur Samad, commended the administration’s efforts at restoring macroeconomic balance and called for greater investments in critical areas.
“With the improvement in the fiscal situation, Nigeria now has a historic opportunity to invest more in human capital, infrastructure, and social protection systems,” Samad said.
The report commended the liberalisation of the foreign exchange regime and the removal of fuel subsidies, both of which contributed to narrowing the parallel market rate gap and enhancing Nigeria’s external reserves. Improved transparency and alignment in the FX market have also boosted investor confidence, leading to a rebound in portfolio inflows and an uptick in remittance flows.
The Central Bank of Nigeria’s (CBN) tightening of monetary policy, marked by interest rate hikes and more credible policy signalling, is also credited for helping to tame inflation, which is projected to drop to 22.1 per cent in 2025.
Despite the gains, the World Bank cautioned that inflation remains “high and sticky,” with food prices still a major concern for households. It stressed that sustained inflationary pressure could undermine the gains from reforms if not addressed through targeted interventions.
In a notable observation, the report warned that while the services sector, particularly finance and ICT, is driving GDP growth, it is not creating sufficient jobs. Nigeria’s jobless growth trend, the Bank argued, reflects deep-seated structural weaknesses and a lack of private sector competitiveness in manufacturing and agriculture.
“Public resources remain limited. The path to inclusive growth lies in enabling the private sector to generate quality jobs while the government focuses on essential services and infrastructure,” said Alex Sienaert, the World Bank’s Lead Economist for Nigeria.
To achieve its ambition of becoming a $1 trillion economy by 2030, Nigeria must tackle critical challenges such as power supply, logistics bottlenecks, and limited access to affordable credit for small businesses.
Policy Recommendations
The World Bank urged the government to sustain its reform momentum, recommending:
Closing infrastructure gaps through PPPs and capital investments.
Improving the regulatory environment to attract long-term investors.
Prioritising education and health to enhance human capital.
Expanding access to financial services for MSMEs.
The report also called for a strategic shift in budgetary priorities — from recurrent spending to capital projects and social investments that can stimulate productivity and reduce poverty.
While praising the administration’s early gains, the World Bank emphasized that Nigeria is at a turning point where consolidating macroeconomic stability must translate into tangible improvements in citizens’ lives.
“The task ahead is to deepen reforms, ensure policy credibility, and unlock the country’s vast human and economic potential,” the report concluded.
As Nigeria grapples with high inflation, weak job creation, and rising living costs, sustaining reform momentum will be critical for turning short-term fiscal gains into long-term inclusive prosperity.