The World Bank has once again called on Nigeria to maintain its momentum on ongoing economic reforms, emphasizing that consistency and commitment are essential for achieving long-term stability and inclusive growth. The international financial institution made this recommendation during its recent Spring Meetings in Washington, D.C., where Nigeria’s economic performance and reform trajectory were central to discussions.

The Call for Continuity

Speaking on Nigeria’s reform efforts, the World Bank’s Vice President for Western and Central Africa, Ousmane Diagana, commended the federal government for recent bold policy actions, including the unification of the foreign exchange market, fuel subsidy removal, and the gradual liberalization of critical sectors.

“These reforms are necessary and long overdue. But the impact is not instantaneous—it requires patience and sustained effort. Nigeria must stay the course to reap the full benefits,” Diagana said during a press briefing.

He noted that while these measures have led to short-term hardships—such as inflation and increased living costs—they lay the foundation for a more resilient and diversified economy.

Key Reforms Commended

1. Subsidy Removal: The World Bank has long maintained that fuel subsidies were unsustainable, costing Nigeria over ₦4 trillion annually. Their removal has opened fiscal space for investment in infrastructure, education, and healthcare.

2. Exchange Rate Unification: The previous multiple exchange rates created distortions and discouraged foreign direct investment. The central bank’s move to allow market-driven exchange rates was hailed as a step towards transparency.

3. Revenue Mobilization: The government’s tax reforms and renewed emphasis on domestic revenue generation, including a review of the VAT framework and improvement in digital tax compliance, were also praised.

Nigeria’s Economic Outlook

Despite macroeconomic challenges, Nigeria’s economy shows signs of gradual recovery. According to the World Bank’s Africa’s Pulse report published in April 2025, Nigeria’s GDP is projected to grow by 3.3% in 2025, up from 2.9% in 2024, provided reforms continue without reversal.

Inflation, though still high at around 28.9% (as per the National Bureau of Statistics), is expected to ease by the end of the year as the Central Bank’s monetary tightening begins to take effect and supply chains stabilize.

Challenges Still Ahead

While the World Bank’s support is encouraging, several challenges remain:

• Social Impact: The cost-of-living crisis continues to hit millions of Nigerians hard, with food inflation and transportation costs surging.

• Revenue Leakage: Despite efforts, issues like oil theft, poor tax collection systems, and bureaucratic inefficiencies persist.

• Trust Deficit: Citizens are skeptical about whether saved funds from subsidy removal are being used judiciously.

To address these concerns, the World Bank urged the Nigerian government to strengthen social safety nets, improve public communication around the reforms, and ensure transparency in fiscal spending.

The Way Forward

The World Bank emphasized three main areas Nigeria must focus on:

1. Investing in Human Capital: Improving education and healthcare to build a productive workforce.

2. Infrastructure Development: Expanding access to power, transport, and digital infrastructure.

3. Governance and Anti-Corruption: Building trust through transparent institutions and accountability.

“Reforms must be matched with visible impact. The people need to see that the sacrifices they are making are translating into better roads, schools, hospitals, and opportunities,” said Alex Sienaert, the World Bank’s Lead Economist for Nigeria.

Conclusion

Nigeria stands at a crucial turning point. The bold reforms initiated under President Bola Ahmed Tinubu’s administration have the potential to unlock sustainable economic growth and attract both local and foreign investment. However, staying the course—despite inevitable pushback and temporary discomfort—is vital.

As the World Bank rightly advises, Nigeria must not relent. With continued commitment, targeted investments, and transparent governance, the country can build a stronger, more inclusive future.

References:

• World Bank Spring Meetings 2025 – www.worldbank.org

• National Bureau of Statistics – Nigeria Inflation Report April 2025

• Africa’s Pulse Report, April 2025 – World Bank

Last Updated on April 17, 2025 by kingstar