The World Bank has urged Nigeria to cut government waste and focus spending on targeted poverty programmes to ensure economic stability.
This was highlighted in the latest Nigeria Development Update Report titled “Staying the Course: Progress Amid Pressing Challenges,” unveiled on Thursday in Abuja.
According to the World Bank, Nigeria should adopt more realistic budgets to avoid unplanned spending and maintain a tight monetary policy to combat inflation. Alex Sienaert, the World Bank’s Lead Economist for Nigeria, said, “Nigeria must stick to realistic budgets and direct spending to programmes that will help reduce poverty.”
The report also recommended that Nigeria unify its exchange rate to reflect market conditions and expand the foreign exchange market. Sienaert stressed the importance of reducing debt risks, saying, “To create more room for development and poverty-focused spending, Nigeria needs to continue removing the fuel subsidy and increasing transparency in the oil sector.”
He also emphasized the need to improve tax policies to boost non-oil revenues and protect vulnerable groups by expanding cash transfer programmes.
Ndiame Diop, the World Bank Country Director for Nigeria, praised the recent macro-fiscal reforms, noting that they were already yielding results. “The bleeding has stopped, revenue is increasing, and the foreign exchange market is improving,” Diop said. However, he stressed that the government must ensure that these improvements are felt by Nigerians in their everyday lives.
Diop also encouraged Nigeria to leverage its competitive exchange rate and invest in sectors like services that have great potential for growth. “Nigeria has what the world needs—people—and there is huge potential in the service sector,” he added.
The NDU report also projected Nigeria’s GDP to grow by 3.3% in 2024, with an average annual growth rate of 3.7% between 2025 and 2027. Inflation is expected to peak at 31.7% in 2024 but is forecasted to fall to 14.3% by 2027 if current policies are maintained.
