…says positive gains lie ahead if sustained
Nigeria is starting to see positive results from substantial policy reforms implemented after facing a near fiscal crisis in 2020, according to the World Bank.
However, the global lender emphasized the importance of staying on course with these changes to secure long-term benefits.
It will be recalled that President Bola Tinubu’s administration has enacted pivotal reforms, such as ending a long-standing petrol subsidy and devaluing the naira, in a bid to revitalize economic output, which has been sluggish for nearly a decade.
The World Bank’s lead economist for Nigeria, Alex Sienaert, highlighted the early successes, pointing to a reduction in the fiscal deficit, which has narrowed from 6.2% of GDP in the first half of 2022 to 4.4% during the same period in 2023.
“We are witnessing fiscal consolidation, with revenues surging primarily due to the removal of the implicit forex subsidy, which was even larger than the petrol subsidy,” Sienaert noted during a presentation in Abuja.
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He added that reforms have sparked robust growth in the services sector, provided stability in the oil sector, and led to improvements in the foreign exchange market.
The World Bank forecasts Nigeria’s economy will grow by 3.3% in 2024, with an expected rise to 3.6% in 2025, citing the importance of fiscal discipline and structural changes.
While the reforms have played a crucial role in averting further economic decline, they have also fueled inflationary pressures.
“The ultimate goal is to create jobs and opportunities for Nigerians,” Sienaert said, underscoring the need for continued reform to ensure sustainable growth in Africa’s largest economy.
