Nigeria’s Economic Growth Must Accelerate to Meet $1tr Target by 2030, World Bank
By Patience Ikpeme
The World Bank has indicated that the nation must achieve a growth rate five times faster than its current trajectory to reach the ambitious goal of a $1 trillion economy by 2030.
This urgent call for accelerated growth comes amid rising poverty levels that continue to challenge the country’s development.
The findings were presented during the launch of the Nigeria Development Update (NDU) report on Monday, titled “Building Momentum for Inclusive Growth.” Alex Sienaert, the World Bank’s Lead Economist for Nigeria, delivered the report, praising the Nigerian government for its recent macroeconomic reforms that have contributed to stabilizing the economy.
However, he noted that further efforts are necessary to ensure that economic growth is inclusive, particularly through the expansion of cash transfer programs aimed at vulnerable populations.
Sienaert argued that international experiences demonstrate that sustainable economic growth and job creation cannot rely solely on the public sector.
He pointed out the limitations of public resources and called for a strategic approach that positions the public sector to provide essential services, such as human capital development and infrastructure, while simultaneously fostering an environment conducive to private sector growth.
“Nigeria is no exception, particularly since public resources remain constrained. A useful strategy is to position the public sector to play a dual role as a provider of essential public services, especially to build human capital and infrastructure, and as an enabler for the private sector to invest, innovate, and grow the economy,” Sienaert stated.
The event saw the participation of key government officials, including Wale Edun, Minister of Finance and Coordinating Minister of the Economy; Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN); and other notable figures from various sectors. Their presence underscored the collaborative effort needed to address the economic challenges facing the nation.
The World Bank’s NDU report called attention to the critical need for Nigeria to accelerate its economic growth to fulfill its aspirations of becoming a $1 trillion economy by 2030.
It noted the importance of rebalancing growth towards more productive sectors that can create jobs and opportunities for the economically vulnerable. While sectors such as finance and information and communication technology (ICT) have been pivotal in driving economic growth, they have not provided sufficient mass employment opportunities, particularly as many Nigerians lack the necessary skills to engage in these industries.
To address these challenges, the World Bank proposed a growth strategy that is primarily led by the private sector but facilitated by the public sector. Central to this strategy is the need to tackle infrastructure deficits, particularly in electricity and transportation, while fostering a competitive business environment that promotes market openness. Additionally, improving access to finance for both new and existing businesses and refining policies in key sectors are essential steps to unlock Nigeria’s economic potential.
The report also noted a promising economic growth rate of 4.6 percent year-on-year in the final quarter of 2024, raising the forecasted growth rate for the entire year to 3.4 percent. This marks the highest growth rate since 2014, excluding the rebound following the COVID-19 pandemic in 2021-2022. Recent reforms have been credited with enhancing Nigeria’s foreign exchange market and strengthening the country’s external position. The report pointed to a significant reduction in the fiscal deficit, which decreased from 5.4 percent of GDP in 2023 to 3.0 percent in 2024, primarily due to a substantial increase in national revenues.
“The fiscal deficit shrank from 5.4 percent of GDP in 2023 to 3.0 percent of GDP in 2024, a major improvement that was driven by a sharp increase in revenues of the entire Federation, which rose from N16.8 trillion in 2023 (7.2 percent of GDP) to an estimated N31.9 trillion in 2024 (11.5 percent of GDP),” the report detailed.
Despite these positive developments, inflation remains a concern, although it is projected to decrease to an annual average of 22.1 percent in 2025, aided by a continued tight monetary policy stance. The World Bank report called for deeper and broader structural reforms to consolidate macroeconomic stability and stimulate inclusive growth, emphasizing the need for the creation of better jobs at scale to alleviate poverty.
Taimur Samad, Acting World Bank Country Director for Nigeria, commended the country for its progress in restoring macroeconomic stability. He noted that with improvements in fiscal management, Nigeria now has a unique opportunity to allocate more resources towards human capital, social protection, and infrastructure development.
During a panel discussion, Finance Minister Wale Edun expressed gratitude for the World Bank’s support and recognition of Nigeria’s advancements. He stressed the importance of macroeconomic stability and transparency in the oil sector as critical components for achieving the nation’s economic objectives.
“We need to push for transparency in the oil sector, which is key to achieving our economic goals. Investment plays a critical role in creating jobs, and we must maintain the momentum to attract more investments into the country,” Edun stated.
CBN Governor Olayemi Cardoso addressed the central bank’s role in maintaining economic stability, particularly in the foreign exchange market. He expressed confidence that ongoing policies would lead to a moderation of inflation and interest rates over time, while also emphasizing the importance of financial inclusion and the CBN’s commitment to supporting the fintech sector to improve access to finance for all Nigerians.
