Nigeria's Macroeconomic Situation Improves Under Tinubu Administration

Strategic Insights -

The World Bank's latest report, Nigeria Development Update (NDU) 2024, highlights the improvements in Nigeria's macroeconomic situation under the Bola Ahmed Tinubu administration. The report, titled "Building Momentum for Inclusive Growth," reveals that economic growth in the fourth quarter of 2024 increased to 4.6% (year-on-year), pushing growth for the full year 2024 to 3.4%, the highest since 2014 (excluding the 2021-2022 COVID-19 rebound). The report also notes that recent reforms have strengthened the foreign exchange (FX) market and Nigeria's external position.

Key Takeaways:

  • Economic growth in the fourth quarter of 2024 was 4.6% (year-on-year), with a full-year growth of 3.4%, the highest since 2014 (excluding the 2021-2022 COVID-19 rebound).
  • The consolidated fiscal position improved in 2024, with a fiscal deficit shrinking from 5.4% of GDP in 2023 to 3.0% of GDP in 2024.
  • Revenue surged in 2024, rising from N16.8 trillion (7.2% of GDP) in 2023 to an estimated N31.9 trillion (11.5% of GDP) in 2024.
  • Inflation remained high and sticky, but is expected to fall to an annual average of 22.1% in 2025.
  • The World Bank recommends consolidating macroeconomic stability and igniting inclusive growth through deeper, wider structural reforms.
  • To achieve a $1 trillion economy by 2030, the pace of growth needs to accelerate further and its composition rebalanced towards productive sectors that generate positive spillovers and create jobs and opportunities.
  • A private sector-led, public sector-facilitated growth strategy can boost inclusive growth, but requires strategies such as addressing infrastructure gaps, fostering healthy competition, improving access to finance, and improving policies in key sectors.

Statistics:

  • Economic growth in the fourth quarter of 2024: 4.6% (year-on-year)
  • Full-year growth in 2024: 3.4%
  • Fiscal deficit in 2023: 5.4% of GDP
  • Fiscal deficit in 2024: 3.0% of GDP
  • Revenue in 2023: N16.8 trillion (7.2% of GDP)
  • Revenue in 2024: an estimated N31.9 trillion (11.5% of GDP)
  • Inflation rate in 2025: 22.1% (annual average)
  • Estimated time to achieve a $1 trillion economy: 2030

Sources:

  • World Bank. (2024). Nigeria Development Update (NDU) 2024: "Building Momentum for Inclusive Growth."
  • Acting World Bank Country Director for Nigeria, Taimur Samad.
  • Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
  • Governor Central Bank of Nigeria (CBN), Olayemi Cardoso.
  • Alex Sienaert, World Bank Lead Economist for Nigeria.