Nigeria’s economy is showing signs of resilience and recovery, with the World Bank projecting that the country’s public debt will drop below 40% of GDP for the first time in over a decade.
This improvement comes amid steady economic growth, tighter fiscal management, and ongoing structural reforms.
According to the World Bank’s October 2025 Nigeria Development Update (NDU) themed ‘From Policy to People: Bringing the Reform Gains Home’, economic growth is expected to rise modestly from 4.2% in 2025 to 4.4% in 2027, buoyed by strong performance in services, non-oil industries, and agriculture. Inflation, though expected to ease gradually, will remain elevated—demonstrating the need for sustained monetary discipline and policy consistency.
According to the NDU, Nigeria’s economy expanded by 3.9% year-on-year in the first half of 2025, up from 3.5% in the same period of 2024.
The growth, according to the World Bank, was driven by strong performance in services and non-oil industries, alongside improvements in oil production and agriculture.
The bank stated, “The country’s external position has strengthened, with foreign reserves exceeding $42 billion and the current account surplus rising to 6.1% of GDP, supported by higher non-oil exports and lower oil imports.
“On the fiscal side, despite lower oil prices, the federal deficit is projected at 2.6% of GDP in 2025, broadly unchanged from 2024, while public debt is expected to decline for the first time in over a decade—from 42.9 to 39.8% of GDP,” a statement on the World Bank’s website stated on Wednesday.
What World Bank’s officials said:
Inflation is expected to gradually ease but remain elevated, requiring sustained monetary discipline and structural reforms to tackle food prices—the “biggest tax on the poor,” said the World Bank’s Senior Economist for Nigeria, Samer Matta.
“The Nigerian government has taken bold steps to stabilize the economy, and these efforts are beginning to yield results,” said World Bank Country Director for Nigeria, Mathew Verghis. “But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians—especially the poor and vulnerable.
Food inflation remains a huge concern
The report cautions that these macroeconomic gains have yet to translate into tangible improvements in people’s lives. Many households continue to face hardship, with poverty and food insecurity remaining high.
Food inflation, according to the report, remains a major concern: poor households—who spend up to 70% of their income on food—have seen the cost of a basic food basket rise fivefold between 2019 and 2024. The NDU notes that while current reforms are addressing long-standing policy distortions, sustained progress in livelihoods will depend on continued efforts to reduce inflation, foster inclusive growth, strengthen public services, and expand support for the most vulnerable.
What you should know
In its May 2025 edition of NDU, the World Bank projected Nigeria’s inflation rate to average 22.1% in 2025 as the Central Bank’s tight monetary stance begins to anchor inflation expectations and restore confidence in macroeconomic management.
The NDU is one of the World Bank’s flagship reports on Nigeria and provides regular assessments of the economic landscape, policy progress, and risks to inclusive and sustainable growth.
