The World Bank has said that Nigeria’s macroeconomic outlook is improving, following a series of fiscal and monetary reforms undertaken by the government.
This was disclosed in a press statement published on the World Bank’s website on Monday, after the launch of the latest edition of the Nigeria Development Update (NDU) report in Abuja.
The report, titled “Building Momentum for Inclusive Growth,” shows that Nigeria’s economy recorded year-on-year growth of 4.6% in the fourth quarter of 2024.
This performance pushed full-year growth to 3.4% in 2024—the highest annual growth rate since 2014, excluding the COVID-19 rebound in 2021 and 2022.
According to the World Bank, this improvement in economic activity was largely underpinned by sustained policy reforms and improved revenue mobilisation.
The statement read, “Nigeria’s macroeconomic situation is improving as a result of sustained reforms, according to the latest edition of the Nigeria Development Update (NDU) report released today.”
Fiscal reforms strengthen public finances
A major highlight of the report is the significant improvement in Nigeria’s fiscal position. The World Bank stated that the consolidated fiscal deficit fell from 5.4% of GDP in 2023 to 3.0% in 2024. This was made possible by a sharp increase in public revenues across the Federation, which rose from N16.8 trillion in 2023, representing 7.2% of GDP, to an estimated N31.9 trillion in 2024, amounting to 11.5% of GDP. This rise in revenue, according to the report, created room for fiscal consolidation and improved external sector buffers.
Speaking on the country’s economic progress, Taimur Samad, the Acting World Bank Country Director for Nigeria, said: “Nigeria has made impressive strides to restore macroeconomic stability. With the improvement in the fiscal situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending; investing more in human capital, social protection, and infrastructure.”
He noted that the shift in the government’s fiscal focus would enable more efficient allocation of public resources, moving away from unsustainable patterns of the past. “The allocation of public resources can begin to shift away from the past unsustainable pattern, and rather towards meeting Nigeria’s large development needs, including the government playing its essential role of providing basic public services and serving as an enabler of private sector–led growth,” he added.
Growth must be rebalanced to drive inclusion
The report observed that while sectors like finance and ICT have become important drivers of GDP growth, they are not delivering inclusive benefits due to their limited capacity to absorb labour. Many Nigerians, the World Bank noted, still lack the necessary skills and access to participate in these modern sectors. Therefore, the composition of growth must shift toward productive areas that can offer employment and generate positive spillovers for the poor and economically vulnerable.
According to the World Bank, achieving the government’s vision of a $1 trillion economy by 2030 will require a more balanced and inclusive approach to growth. The emphasis, it said, should be on economic sectors and firms that are highly productive, capable of creating jobs at scale, and able to improve the livelihoods of millions of Nigerians.
Alex Sienaert, the World Bank’s Lead Economist for Nigeria, reinforced this message, stating that: “International experience suggests that the public sector cannot sustainably generate growth and jobs by itself. Nigeria is no exception, particularly since public resources remain constrained.”
He explained that a dual role for government is essential—one that strengthens public service delivery and infrastructure while enabling private sector-led innovation and investment.
“A useful strategy is to position the public sector to play a dual role as a provider of essential public services, especially to build human capital and infrastructure, and as an enabler for the private sector to invest, innovate, and grow the economy,” he said.
The report concludes that while Nigeria’s current macroeconomic gains are promising, the country must now build on this momentum through bold and targeted policy reforms that support inclusive development and long-term prosperity.
