Abuja: Nigeria's economy is witnessing signs of improvement, attributed to the country's commitment to sustained reforms, according to Taimur Samad, World Bank's Acting Country Director for Nigeria. Samad discussed these developments based on the latest Nigeria Development Update (NDU) report, titled 'Building Momentum for Inclusive Growth', released in Abuja. The report highlighted several key indicators of progress, including a stable exchange rate, rising foreign reserves, and improved fiscal conditions.
According to News Agency of Nigeria, Samad noted that these improvements in fiscal conditions were mainly driven by increased federation revenues, significantly contributing to the country's positive economic outlook. Economic growth in the last quarter of 2024 surged to 4.6 per cent year-on-year, bringing the full-year growth for 2024 to 3.4 per cent, the highest since 2014, excluding the 2021-2022 COVID-19 rebound. Additionally, the fiscal deficit reduced from 5.4 per cent of GDP in 2023 to 3.0 per cent in 2024, driven by a sharp rise in federation revenues from N16.8 trillion in 2023 to an estimated N31.9 trillion in 2024.
Despite these gains, Samad emphasised ongoing challenges, including persistent high inflation, stressing the importance of the Central Bank of Nigeria maintaining tight monetary policies to ensure continued economic stability. If successful, inflation is projected to fall to just over 22 per cent on an annual average by 2025, marking a significant achievement. The report also highlighted that maintaining momentum on macro-fiscal reforms could foster private sector growth and create job opportunities for Nigerians.
Alex Sienaert, World Bank's Lead Economist for Nigeria, provided further insights, highlighting the need for careful monitoring of revenue gains from the fuel subsidy removal and cautioning against overly ambitious budget projections for 2025. He also emphasised the need to scale up the targeted cash transfer programme to assist vulnerable populations. Sienaert outlined several steps for achieving macroeconomic stability, including reducing governance costs, accelerating economic growth, and adopting a private sector-led, public sector-facilitated growth strategy. This strategy aims to address critical infrastructure gaps, particularly in electricity and transportation, while fostering a competitive business environment. Additionally, improving access to finance and policies to support firm growth, boost productivity, and unlock key sector potential were highlighted.
The News Agency of Nigeria reports that the NDU is a biannual World Bank report assessing economic and social developments in Nigeria, offering an in-depth analysis of the country's medium-term development challenges. (NAN)(www.nannews.ng)