The World Bank has commended the Nigerian government on its ongoing important steps toward stabilizing the nation’s economy through recent policy reforms, but charged the government that more needed to be done to ensure these gains translate into better living standards for its citizens.
The latest ‘Nigeria Development Update (NDU)’ report released by the multilateral finance institution today and titled “From Policy to People: Bringing the Reform Gains Home” noted the progress made by the government in economic growth, domestic revenue mobilization, monetary policy, and external balances while underscoring persistent challenges such as high food inflation, widespread poverty, and structural barriers that constrain inclusive growth.
According to the NDU, Nigeria’s economy expanded by 3.9% year-on-year in the first half of 2025, up from 3.5% in the same period of 2024. Growth was driven by strong performance in services and non-oil industries, alongside improvements in oil production and agriculture.
The report also showed that the country’s external position had strengthened, with foreign reserves exceeding $42 billion and the current account surplus rising to 6.1% of GDP due to higher non-oil exports and lower oil imports.
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On the fiscal side, the NDU report stated that despite lower oil prices, the federal deficit was still projected at 2.6% of GDP in 2025, broadly unchanged from 2024, while public debt is expected to decline for the first time in over a decade—from 42.9 to 39.8% of GDP.
However, the report noted that these macroeconomic gains had yet to translate into tangible improvements in people’s lives as many households continued to face hardship, with poverty and food insecurity remaining high while food inflation remains a major concern: poor households—who spend up to 70% of their income on food—have seen the cost of a basic food basket rise fivefold between 2019 and 2024.
The NDU findings reflected that while current reforms were addressing long-standing policy distortions, sustained progress in livelihoods would depend on continued efforts to reduce inflation, foster inclusive growth, strengthen public services, and expand support for the most vulnerable.
Commenting on the report’s findings, World Bank Country Director for Nigeria, Mathew Verghis, said: “The Nigerian government has taken bold steps to stabilize the economy, and these efforts are beginning to yield results.
“But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians—especially the poor and vulnerable”, the banker added.
To help bridge the gap between macroeconomic progress and improved welfare, the report identifies three urgent priorities, namely tackling food inflation by removing trade barriers such as import bans and excessive duties, while addressing structural bottlenecks in seeds, input supply, security, logistics, and infrastructure (including transport, power, storage, and cold chains).
Others are, Improving the efficiency of public spending through greater fiscal transparency, stronger discipline in Federation Account Allocation Committee (FAAC) deductions, and a national pact to align fiscal policy with development objectives, especially human capital investments; and Expanding and institutionalizing social protection, including regular, domestically financed cash transfers for the ultra-poor and a shock-responsive safety net system to help households manage crises.
According to the World Bank’s report, the outlook for Nigeria’s economy remains cautiously optimistic as growth is projected to accelerate modestly from 4.2% in 2025 to 4.4% in 2027, driven by services and supported by agriculture and non-oil industry.
Similarly, the bank projected that Inflation was expected to gradually ease but remain elevated, requiring sustained monetary discipline and structural reforms to tackle food prices, which World Bank’s Senior Economist for Nigeria, Samer Matta, described as the “biggest tax on the poor”.
