• Report Highlights Gradual Inflation Decline and Service Sector Growth
By Seun Ibukun-Oni, Abuja
DAILY COURIER - The World Bank has forecasted a 3.6% average annual economic growth rate for Nigeria between 2025 and 2026. This projection, detailed in the *Global Economic Prospects January 2025* report released on Thursday, indicates a gradual strengthening of the country’s economy driven by monetary policy adjustments, declining inflation, and robust activity in the services sector.
The report highlights that Nigeria’s inflation is expected to decline following 2024’s monetary policy tightening, which will bolster consumption and support growth in services such as financial and telecommunication industries. According to the World Bank, these sectors remain pivotal to Nigeria’s economic progress.
While oil production is projected to increase over the forecast period, it is expected to remain below the OPEC quota. The report also notes that per capita income growth will continue to be weak, underscoring the need for sustainable economic reforms.
"Growth in Nigeria is forecast to strengthen to an average of 3.6 percent a year in 2025-26. Following monetary policy tightening in 2024, inflation is projected to gradually decline, boosting consumption and supporting growth in the services sector," the report stated.
The World Bank attributed Nigeria’s 3.3% GDP growth in 2024 primarily to the services sector, with notable contributions from financial and telecommunication services. It added that macroeconomic and fiscal reforms, including the unification of the exchange rate and improved revenue administration, have helped boost business confidence and government revenues.
"Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy," the report emphasized.
On a broader scale, growth in Sub-Saharan Africa is projected to average 4.2% in 2025-26, led by industrial-commodity-exporting countries and major regional economies. However, challenges such as high government debt, elevated interest rates, and limited fiscal space pose significant risks to the region’s economic recovery.
The report cautioned that per capita income gains in the region will remain insufficient to significantly reduce extreme poverty, with downside risks including weaker global growth, a sharper-than-expected slowdown in China, regional instability, and climate-related disruptions.
