World Bank: Nigeria’s Economy Growing Despite Persistent Inflation

World Bank

World Bank: Nigeria’s Economy Growing Despite Persistent Inflation

Nigeria’s economic outlook is improving, with growth expected to stay positive, even as the country grapples with persistent high inflation and some of the weakest early childhood development outcomes globally, the World Bank has said.

The assessment was presented on Tuesday in Abuja by Matthew Verghis, World Bank Country Director for Nigeria, at the launch of the bank’s April edition of the Nigeria Development Update (NDU) titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development.”

Verghis said the report highlights early childhood development (ECD) as a critical but neglected foundation for long‑term national prosperity. According to the World Bank, brain development from pregnancy to age five is the most rapid and most responsive to nutrition, health stimulation, early learning, and safety. Investing in this period delivers strong economic returns — estimated at 7–13% annually — through better educational outcomes, higher lifetime earnings, lower healthcare costs, and stronger social cohesion.

However, Nigeria’s early childhood indicators remain weak and uneven, particularly compared with other developing countries and global benchmarks. On average, 110 out of every 1,000 children die before age five, about 40% of children are stunted, and an estimated 52% are not developmentally on track before entering school. Verghis said these figures reflect a genuine crisis given Nigeria’s aspirations for prosperity.

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These poor outcomes stem from gaps in access to basic services, including maternal healthcare, nutrition, clean water, safe sanitation, and early learning opportunities — especially pronounced among poorer households and in the northern parts of the country.

Verghis acknowledged ongoing government efforts, supported by the World Bank and partners such as the Bill & Melinda Gates Foundation, to strengthen primary healthcare systems, improve nutrition, and expand early learning programmes. He emphasised the need for a coordinated, child‑centred national strategy that supports families from pregnancy through age five, improves service delivery, and scales effective interventions nationwide. Talks are underway with the National Economic Council and state governments to design a comprehensive national programme on early childhood development.

On broader macroeconomic issues, Fiseha Haile, the World Bank’s Lead Economist for Nigeria, said the economy’s growth prospects remain cautiously optimistic. The country is projected to grow by about 4.2% between 2026 and 2028, underpinned by continued macroeconomic stabilisation, structural reforms, and increased investment. Nigeria’s external position has strengthened, and ongoing reforms are delivering gradual results despite external shocks.

However, Haile warned that rising global uncertainty, particularly stemming from ongoing geopolitical tensions in the Middle East, continues to pose risks to Nigeria’s economic trajectory. Inflation — though eased somewhat from its peaks — remains elevated and persistent, eroding household purchasing power and dampening real income gains.

To sustain and broaden the benefits of economic recovery, the World Bank urged Nigeria to adopt structural policy measures that promote inclusive growth and protect the most vulnerable. These include:

Reducing trade barriers and import bans that raise production costs
Lowering tariffs and reopening key sectors to competition
Improving market efficiency to reduce consumer prices
Targeting social support programmes, such as cash transfers, to the poor instead of broad‑based subsidies
Maintaining fiscal discipline, a tight monetary policy and prudent foreign exchange management

Haile also called on the government to treat any oil windfalls as temporary and save rather than spend them, using targeted interventions to cushion vulnerable populations from rising prices and economic shocks.

The World Bank reaffirmed its commitment to supporting Nigeria in strengthening early childhood development, deepening economic reforms, and enhancing social protection measures to ensure that growth translates into tangible improvements in people’s lives.