Economy News Correspondent
Ruth Ogbechie
The World Bank has cautioned that Nigeria’s ambition to bring inflation down to single digits in the short term is unrealistic, citing deep-rooted structural and economic weaknesses that continue to drive high consumer prices.
In its latest Africa’s Pulse report, released on Tuesday, the Bretton Woods institution projected that Nigeria would remain among a group of African countries — including Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe — that will continue to experience double-digit inflation through 2025.
According to the report, while 37 of Africa’s 47 economies are expected to achieve single-digit inflation by 2026, Nigeria stands out as an exception due to a combination of factors such as sustained currency depreciation, rising food and energy costs, and persistent supply chain disruptions.
This assessment sharply contrasts with the Federal Government’s optimism that recent reforms — including the unification of the foreign exchange market, the removal of fuel subsidies, and tighter monetary measures by the Central Bank of Nigeria — would help bring inflation under control.
At a recent lecture at the Lagos Business School, CBN Governor Olayemi Cardoso reiterated that achieving single-digit inflation remains a medium-term goal for the bank. Similarly, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, has repeatedly expressed confidence that Nigeria’s ongoing policy reforms will soon stabilize prices.
However, the World Bank argues that Nigeria’s inflation dynamics are fundamentally different from many of its peers in Sub-Saharan Africa. It noted that while inflation across the region has been steadily declining—from a median of 9.3% in 2022 to 4.5% in 2024—Nigeria continues to struggle with inflation rates exceeding 20%, undermining consumer purchasing power and business confidence.
The report, titled “Pathways to Job Creation in Africa,” highlighted that although Sub-Saharan Africa’s overall economic outlook remains resilient, Nigeria’s stubbornly high inflation could hinder growth and weaken real income gains for millions of households.
“While countries like Ivory Coast and Kenya are benefiting from price stability and easing monetary conditions, Nigeria’s inflation trajectory continues to weigh on consumer demand and macroeconomic stability,” the report stated.
Economists say Nigeria’s inflationary pressures stem largely from the naira’s depreciation, high logistics and energy costs, and worsening food insecurity linked to poor infrastructure and insecurity in key agricultural zones.
The World Bank also projected that the region’s economy will grow from 3.5% in 2024 to 3.8% in 2025, with Nigeria receiving a modest 0.6 percentage point upgrade in its growth forecast — thanks to a rebound in oil production and a gradual recovery in investment. Still, it warned that the country’s inflation problem remains a major obstacle to inclusive growth.
Andrew Dabalen, the World Bank’s Chief Economist for Africa, emphasized that while most regional currencies have stabilized, Nigeria continues to face “exchange rate pass-through” effects and structural bottlenecks that worsen price instability.
The report further urged African governments, particularly Nigeria’s, to focus on policies that reduce the cost of doing business, strengthen institutions, and support private sector-led job creation. It identified sectors such as agribusiness, healthcare, housing, tourism, and mining as key drivers for sustainable employment growth.
“Over the next 25 years, Sub-Saharan Africa’s working-age population will increase by more than 600 million people,” Dabalen noted. “The challenge is ensuring that these individuals find decent and productive jobs in an environment of stability and opportunity.”
Despite the government’s efforts, the World Bank’s assessment underscores a sobering reality — that achieving single-digit inflation in Nigeria will require not just monetary tightening, but deeper structural reforms aimed at improving productivity, stabilizing the naira, and restoring investor confidence.
