Nigeria’s economy recorded its fastest growth in a decade in 2024, driven by a strong fourth quarter and an improved fiscal situation, according to the World Bank, which also warned that persistent high inflation remains a challenge.
Bold reforms implemented by President Bola Tinubu, including the end of costly fuel subsidies, the reduction of electricity allocations, and the dual devaluation of the naira, have increased upward pressure on prices.
The World Bank’s Chief Economist for Nigeria, Alex Sienaert, said during a presentation in the capital Abuja that the economy grew by 4.6% year-on-year in the fourth quarter of 2024, and highlighted continued expansion at the beginning of 2025 based on high-frequency trade indicators.
The World Bank forecasts that Nigeria's economy will grow by 3.6% this year.
Nigeria's exchange rate reforms have created a unified, stable exchange rate that reflects the market, allowing the central bank to rebuild official reserves, which now exceed $37 billion, Sienaert said.
"This is important because it provides a cushion for the economy against external volatility," he added.
Sienaert also mentioned that public revenues increased by 4.5% of GDP last year, a “remarkable achievement” due to the removal of exchange rate subsidies, improvements in tax administration, and increased remittances.
Higher revenues helped reduce the budget deficit to about 3% of GDP in 2024, down from 5.4% in 2023. However, the total revenue gain from the removal of fuel subsidies has not yet fully materialized, Sienaert said.
Nevertheless, Nigeria continues to face high inflation, and Sienaert warned that tight monetary policy and disciplined fiscal policy must be maintained.
