Nigeria’s economy is projected to expand by 4.4% in 2027, up from 4.2% forecast for 2025, according to the World Bank’s October 2025 Nigeria Development Update (NDU).
The Bank said the growth will be led by robust performance in services, with additional support from agriculture and non-oil industries, reflecting the growing shift away from oil dependency.
Samer Matta, World Bank senior economist for Nigeria, said in Abuja that while inflation is expected to gradually ease, it will “remain elevated,” requiring monetary discipline and structural reforms to bring down food costs, which he called “the biggest tax on people with low income.” He noted that the outlook for Nigeria’s economy remains “cautiously optimistic” amid ongoing reforms.
The NDU report revealed that Nigeria’s economy expanded by 3.9% year-on-year in the first half of 2025, compared with 3.5% in the same period of 2024. “Growth was driven by strong performance in services and non-oil industries, alongside improvements in oil production and agriculture,” the report said, underscoring the broadening base of economic activity.
Nigeria’s external position has also improved, with foreign reserves surpassing $42 billion and the current account surplus rising to 6.1% of GDP, buoyed by higher non-oil exports and reduced oil imports. These gains signal a more resilient macroeconomic environment following years of volatility.
Despite weaker global oil prices, the federal deficit is projected to hold steady at 2.6% of GDP in 2025, nearly unchanged from 2024. The World Bank added that public debt is expected to decline for the first time in over a decade, dropping from 42.9% to 39.8% of GDP, suggesting early success from fiscal consolidation efforts.
However, the Bank cautioned that the benefits of these macroeconomic gains have not yet reached most Nigerians. Poverty and food insecurity remain elevated, with many households still struggling under the weight of high living costs.
According to the NDU, Nigeria’s poor households, who spend as much as 70% of their income on food, have seen the cost of a basic food basket increase fivefold between 2019 and 2024. This has deepened inequality and eroded real incomes, highlighting the urgency of targeted welfare measures.
The report identified three policy priorities to bridge the gap between economic progress and improved welfare: reducing food inflation, improving fiscal transparency, and expanding social protection.
“Tackling food inflation by removing trade barriers such as import bans and excessive duties, while addressing structural bottlenecks in seeds, input supply, security, logistics, and infrastructure (including transport, power, storage, and cold chains),” the report said. The World Bank also urged reforms to improve public spending efficiency through stronger discipline in Federation Account (FAAC) deductions and alignment of fiscal policy with human capital investment.
It further recommended institutionalizing social protection, including “regular, domestically financed cash transfers for the ultra-poor and a shock-responsive safety net system to help households manage crises,” to cushion vulnerable groups from economic shocks.
Mathew Verghis, World Bank country director for Nigeria, praised government reforms aimed at stabilizing the economy, noting that the measures are “beginning to yield results.” He added, “But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians, especially people with low-income and the vulnerable.”
Key stakeholders at the NDU event included Finance Minister Wale Edun, Nasarawa State Governor Abdullahi Sule, representatives of the Central Bank of Nigeria (CBN), and Ebele Enunwa, CEO of Sundry Markets Ltd., reflecting broad engagement in Nigeria’s reform dialogue.
