Nigeria’s inflation rate could decline to an annual average of just over 22 percent in 2025, if the Central Bank of Nigeria maintains its current tight monetary stance, the World Bank said Monday at the launch its latest Nigeria Development Update (NDU) in Abuja.
Taimur Samad, the World Bank’s Country Director for Nigeria, speaking at the lunch, stated that Nigeria’s macroeconomic situation is improving because of the commitment to sustain reforms, but warned that the war is not won yet due to many challenges including inflation which he said has remained “high and sticky.”.
“There is a lot to be positive about on Nigeria. Growth is up. The exchange rate is market reflective and more stable. Foreign reserves have increased. The fiscal position is much improved on the back of a surge in federation revenues. Now, needless to say, the war is not won”, he said.
“It will be crucial for the CBN to stay the course with tight monetary policy to anchor stability. But if it does so, as we anticipate it will, we expect that inflation will fall to an annual average of just over 22% in 2025. That is a major achievement”, Samad added.
He further highlighted that a key point of the NDU report is the recommendation for Nigerian government to stay the course on tough macro fiscal reforms, and undertake yet more reforms to fire up and drive growth, job creation, and share an economic opportunity.
According to Samad, doing this will strengthen macroeconomic foundation as a launching pad to build on an economy that is conducive for the private sector to grow and generate more productive jobs for Nigerians.
The report also urged government to consider a private sector-led, public sector-facilitated growth strategy whereby the public sector plays a dual role, noting that a lack of productive jobs not only constrains inclusive growth and poverty reduction, it also risks wandering the potential of young Nigerians’ ambitions and could further fuel unrest and conflict.
The NDU is the World Bank’s regular flagship report on Nigeria. It covers at least every six months, providing a dive into the Nigerian economy, covering recent developments in economic policy and providing perspective on the outlook for the economy going forward.
The current issue of the May 2025 NDU focuses on inclusive growth, especially for the poor and economically insecure. The NDU report also builds on the last edition in October 2024 that focused on jobs.
Samad stressed that the NDU is more than just a report, “It is a tool for collective reflection and action”, he said.
