The World Bank has projected Nigeria’s economy will grow by 3.5% in 2025, with a slight increase to 3.7% in 2026.

This forecast, outlined in the latest Global Economic Prospects report, indicates a modest recovery amid ongoing economic challenges and global uncertainties.

The report states that Nigeria’s economic growth is estimated to have improved to 3.3% in 2024, primarily driven by robust activity in the services sector, especially in financial and telecommunication services.

The report read, “In Nigeria, growth increased to an estimated 3.3 per cent in 2024, mainly driven by services sector activity, particularly in financial and telecommunication services.

“Macroeconomic and fiscal reforms helped improve business confidence. In response to rising inflation and a weak naira, the central bank tightened monetary policy.

“Meanwhile, the fiscal deficit narrowed due to a surge in revenues driven by the elimination of the implicit foreign exchange subsidy, following the unification of the exchange rate and improved revenue administration.”

The World Bank noted that Nigeria’s projected growth for 2025 and 2026 would be supported by a gradual decline in inflation, following the monetary tightening measures implemented in 2024.

This is expected to boost domestic consumption and further support the services sector, which continues to be the primary driver of economic growth.

The report pointed out that Nigeria’s growth, along with South Africa’s, contributed to an increase in the regional average to 2.2% in 2024.

Nigeria’s increased oil production and South Africa’s improved electricity supply were key factors behind this performance.

In contrast, the rest of Sub-Saharan Africa saw an average growth rate of 4.0% during the same period.

The World Bank expects Nigeria’s economic growth to strengthen to an average of 3.6% annually in 2025 and 2026, with strong activity in the services sector and a recovery in domestic demand playing a central role.

The report stated, “Growth in Nigeria is forecast to strengthen to an average of 3.6 per cent 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, which continues to be the main driver of growth.

“Oil production is expected to increase over the forecast period but remain below the OPEC quota. The baseline forecast implies that per capita income growth will remain weak over the forecast horizon.”