The World Bank has said that Nigeria’s economy recorded its fastest growth in about a decade in 2024, driven by a strong fourth quarter and an improved fiscal position.
During a presentation on Monday, the bank’s lead economist for Nigeria, Alex Sienaert, said Nigeria’s economy grew by 4.6% year-on-year in the fourth quarter of 2024.
Quoting high-frequency business indicators, he said the economy continued to expand in early 2025.
He, however, warned that persistently high inflation remains a challenge.
The bank is expected to launch the Nigeria Development Update report in Abuja today. The report is a bi-annual in-depth examination of selected economic and policy issues and an analysis of Nigeria’s development challenges.
The development comes after bold economic reforms by President Bola Tinubu’s administration, such as the removal of petrol subsidies, slashing electricity allowances and devaluation of the naira currency, have added to upward pressure on prices.
Nigeria’s annual inflation rate dropped to 23.18% in February 2025, its lowest level since June 2023, from 24.48% in January. Meanwhile, food inflation eased to 23.51%, marking its lowest rate since September 2022, compared to 26.08% in the previous month. The core inflation, which excludes the prices of volatile agricultural products and energy, quickened to 24.43%, from 23.01% in the previous month. On a monthly basis, consumer prices rose by 3.90% in March, accelerating from 2.04% in February.
The World Bank expects Nigeria’s economy to grow by 3.6% this year.
The country’s foreign exchange reforms have created a market-reflective, unified and stable exchange rate, allowing the central bank to rebuild official reserves, now exceeding $37 billion, Sienaert said.
“That’s significant because this is the cushion the economy has against external volatility,” he said.
Sienaert said government revenue rose by 4.5% of GDP last year, a “remarkable achievement” driven by the removal of foreign exchange subsidies, improved tax administration and higher remittances.
The higher revenue helped cut the fiscal deficit to an estimated 3% of GDP in 2024, from 5.4% in 2023. But the full revenue benefit from the removal of the fuel subsidy is also yet to fully materialise, Sienaert said.
Despite the gain, Sienaer warned that Nigeria continues to grapple with high inflation.
He cautioned that tight monetary policy and disciplined fiscal policy must be sustained.
