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Nigeria’s economy experienced its fastest growth in nearly ten years in 2024, according to a new World Bank report released on Monday. The growth was largely driven by a strong performance in the fourth quarter and an improved fiscal outlook. However, the World Bank warned that persistently high inflation remains a significant concern.
Key reforms implemented by President Bola Tinubu — including the removal of costly petrol subsidies, cuts to electricity allowances, and two devaluations of the naira — have added to inflationary pressures but also laid the groundwork for structural transformation.
During a presentation in Abuja, the World Bank’s Lead Economist for Nigeria, Alex Sienaert, stated that the economy grew by 4.6% year-on-year in the fourth quarter of 2024. He also noted signs of continued expansion into early 2025, citing high-frequency business indicators.
The World Bank projects 3.6% GDP growth for Nigeria in 2025.
According to Sienaert, Nigeria’s foreign exchange reforms have led to “a market-reflective, unified and stable exchange rate,” which has enabled the Central Bank to rebuild its official reserves, now surpassing $37 billion.
“That’s significant because this is the cushion the economy has against external volatility,” he said.
Sienaert highlighted that government revenue rose by 4.5% of GDP in 2024 — a “remarkable achievement” credited to the removal of foreign exchange subsidies, enhanced tax administration, and increased remittance inflows.
This revenue boost helped reduce Nigeria’s fiscal deficit to an estimated 3% of GDP in 2024, down from 5.4% in 2023. However, Sienaert noted that the full revenue gains from the fuel subsidy removal are “yet to fully materialise.”
Despite these positive trends, high inflation remains a serious concern. Sienaert stressed the importance of maintaining both tight monetary policy and disciplined fiscal management to keep the economy on track.
