The World Bank has emphasized the need for President Bola Tinubu’s administration to reduce wasteful expenditures and channel funds towards targeted poverty alleviation initiatives.
This recommendation comes from the latest Nigeria Development Update (NDU) Report, titled ‘Staying the Course: Progress Amid Pressing Challenges,’ which was unveiled in Abuja on Thursday.
The report underlines the importance of adhering to realistic budgets to avoid unplanned expenditures. Alex Sienaert, the World Bank’s lead economist for Nigeria, stated, “The title of the NDU highlights the necessity of sustaining sound policies while addressing structural issues that contribute to inflation and hinder long-term investment, growth, and job creation.”
Sienaert further noted that the report advocates for a tight monetary policy and continued enhancement of policy effectiveness until Nigeria achieves a stable disinflation trajectory. He explained that “to effectively reduce debt risks and create space for development and poverty-focused spending, the government must concentrate on four key areas.”
Additionally, the report stresses the importance of protecting vulnerable populations through expanded cash transfer programs and strengthened social safety nets. “These key recommendations on policy priorities will help build upon Nigeria’s macro-critical reforms and ignite growth and job creation,” Sienaert remarked.
The report provides an optimistic outlook on Nigeria’s economic trajectory, projecting a GDP growth rate of 3.3% in 2024, increasing to an average of 3.7% from 2025 to 2027. However, headline inflation is anticipated to peak at an average annual rate of 31.7% in 2024, primarily due to the previous depreciation of the naira and rising gasoline prices. “In the medium term, maintaining the current policy mix will lead to a reduction in inflation, which is expected to decrease to 14.3% by 2027 under the base case scenario,” Sienaert stated.
Ndiame Diop, the World Bank country director for Nigeria, echoed Sienaert’s sentiments, noting that the ongoing macro-fiscal reforms are already yielding positive results. He highlighted the necessity for Nigeria to leverage its competitive exchange rate, a development not seen in the country for the past 40 years. “Nigeria possesses what the global market desires—its people—and there is tremendous potential in the service sector,” Diop remarked.
