World Bank Maintains Nigeria’s Growth Forecast At 3.6%

Despite rising global trade tensions and slower worldwide economic momentum, the World Bank has reaffirmed its projection that Nigeria’s economy will grow by 3.6% in 2025.

This was revealed in the latest edition of the Bank’s Global Economic Prospects report released Tuesday. While the Bank downgraded growth forecasts for nearly 70% of global economies—including the U.S., China, and major European markets—it held firm on Nigeria’s trajectory, citing the country’s recent macroeconomic reforms and stabilising business environment.

“Growth in Nigeria is forecast to strengthen to 3.6% in 2025 and to an average of 3.8% in 2026–27,” the report stated. It attributed this optimism to tighter monetary policy introduced in 2024 to curb inflation and currency volatility, alongside improved investment flows, particularly in the services sector. Financial services and ICT are expected to remain the engines of expansion, while industrial output remains capped by sluggish crude oil production.

Globally, however, the World Bank slashed its 2025 growth forecast from earlier projections by 0.4 percentage points to 2.3%, warning that trade wars and geopolitical uncertainty could drag down output further.

Still, Nigeria and the broader sub-Saharan Africa (SSA) region appear somewhat shielded from the direct shocks of U.S.–China trade tensions. The Bank noted that SSA’s limited export exposure to these major economies—beyond commodity flows—buffers it from the brunt of rising tariffs. However, the region remains deeply vulnerable to external shocks like commodity price declines or a sharper-than-expected economic slowdown in China, which would dent demand for African metals and minerals.

The report cautioned that if global trade continues to fragment, the ripple effects on SSA could grow significantly, particularly given many countries’ dependence on extractive exports and fragile fiscal space. Conflict, public debt, and climate risks were also flagged as key threats. Despite a projected gradual decline in debt-to-GDP ratios, high debt servicing costs are still crowding out development spending in many SSA countries.

On living standards, the outlook remains sobering. Per capita income growth in SSA—including Nigeria—is projected to average just 1.6% annually between 2025 and 2027, falling short of levels required to meaningfully reduce extreme poverty. By 2027, over a quarter of SSA countries are expected to still lag behind their pre-pandemic per capita income levels.

The World Bank also pointed to a looming jobs crisis. The region’s working-age population is set to nearly double between 2025 and 2050, the fastest growth of any region globally. Without strong reforms and policies to unlock structural transformation, SSA economies may struggle to absorb the swelling labour force.

Meanwhile, diplomatic signals from key partners are shifting. U.S. Ambassador Richard Mills Jr. recently stated that Washington would pivot towards private sector-led investments in Nigeria and SSA—signalling a reduction in aid support for critical services.

Ultimately, the Bank’s message is clear: while Nigeria and SSA may weather the storm of trade wars better than others, reforms must go deeper and growth must be more inclusive to improve livelihoods and avoid deepening inequality.