The World Bank has projected that Nigeria’s inflation rate will average 22.1% in 2025. This expected decline is attributed to the Central Bank of Nigeria’s tight monetary policy, designed to restore price stability and manage inflation expectations.
The projection was revealed in a statement published on the World Bank’s official website, shortly after the launch of the latest Nigeria Development Update report in Abuja. Titled “Building Momentum for Inclusive Growth,” the biannual report reviews recent economic developments and policy measures, while highlighting key priorities for sustaining reforms and promoting inclusive economic progress.
According to the report, key macroeconomic indicators, particularly GDP growth, revenue mobilization, and fiscal consolidation, headline inflation remains a pressing concern. “The report further adds that inflation has remained high and sticky but is expected to fall to an annual average of 22.1 per cent in 2025, as a sustained tight stance firmly establishes monetary policy credibility and dampens inflationary expectations.”
According to the World Bank, major factors driving inflation in recent years include the removal of petrol subsidies, exchange rate unification, increasing logistics and energy costs, and repeated disruptions in food supply. However, it noted that the Central Bank’s tightening measures are beginning to yield results, with inflationary pressures expected to ease in the year ahead.
The report highlights steady improvements in Nigeria’s macroeconomic outlook. The economy recorded a 4.6% year-on-year growth in Q4 2024, pushing full-year growth to 3.4%, the highest since 2014, excluding the post-pandemic rebound.
On the fiscal front, performance also strengthened. The consolidated fiscal deficit narrowed significantly from 5.4% of GDP in 2023 to 3.0% in 2024. Total government revenues rose from N16.8tn in 2023 to an estimated N31.9tn in 2024, equivalent to 11.5 percent of GDP.
The World Bank noted that Nigeria’s improving macroeconomic conditions offer a “historic opportunity” to realign public spending toward impactful development goals.
The Acting World Bank Country Director for Nigeria, Taimur Samad, stated that “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 stressed that public spending must move away from unsustainable past practices and focus on closing the country’s critical development gaps
The report emphasized that while sectors like finance and ICT are expanding, they are not creating enough jobs to significantly reduce poverty, as many Nigerians lack the necessary access or skills to participate in these industries.
To address this, the World Bank’s Nigeria Development Update recommends a private sector-led growth strategy focused on improving infrastructure, expanding access to finance, boosting competition, and reforming key productive sectors to drive job creation and inclusive development.
Alex Sienaert, World Bank Lead Economist for Nigeria, said, “International experience suggests that the public sector cannot sustainably generate growth and jobs by itself. Nigeria is no exception.” He added, “A useful strategy is to position the public sector to play a dual role as a provider of essential public services… and as an enabler for the private sector to invest, innovate, and grow the economy.”
The Nigeria Development Update is one of the World Bank’s flagship economic publications on Nigeria and offers regular analysis of economic trends, policy reforms, and emerging risks in Africa’s largest economy.
