World Bank upgrades growth outlook for Nigeria, other African economies
The World Bank has revised its economic growth forecast for Nigeria and other sub-Saharan African countries, projecting a stronger expansion of 3.8 per cent in 2025, driven by easing inflation and more stable macroeconomic conditions.
This upgrade follows recent monetary policy adjustments, including the Central Bank of Nigeria’s decision last month to lower its benchmark interest rate from 27.5 to 27 per cent, signalling a shift towards more accommodative policies.
The World Bank’s latest ‘Africa Puls’e report highlights improved growth prospects for key economies in the region, including Nigeria, Ethiopia and Ivory Coast. It notes that real incomes are also rising more rapidly this year and are expected to continue on an upward trajectory over the next two years.
The growth forecast, previously set at 3.5 per cent in April, has been raised due to stabilising foreign exchange markets and inflation rates, particularly in countries like Ethiopia, allowing central banks room to cut interest rates.
Looking ahead, the World Bank projects regional growth will average 4.4 per cent annually over the next two years, slightly above the earlier estimate of 4.3 per cent.
Out of the 47 economies in sub-Saharan Africa monitored by the Bank, 30 countries saw upward revisions in their growth outlook, reflecting improving economic conditions across much of the continent.
The regional economic outlook, however, faces risks from trade uncertainty sparked by the policies of US President Donald Trump, high debt burdens and the need to create jobs for millions of young people entering the job market.
Trade challenges remain very high. We don’t know how this is going to be resolved because there are lots of negotiations going on,” said the World Bank’s Chief Economist for Africa, Andrew Dabalen, citing the expiry of AGOA, a key trade agreement between the United States and African nations.
The World Bank urged governments to focus on the creation of good jobs by improving the general business environment in order to nurture small and mid-sized firms.
“These jobs have to be jobs that provide a living wage and secure lives,” Mr Dabalen stated, noting that three-quarters of the jobs created in the region’s economies are in the informal sector.
Lack of employment opportunities and other grievances have sparked youth-led protests in Kenya, Nigeria and Madagascar since last year, highlighting the scale of the challenge for policymakers.
“The consequences of not solving these problems are hard to contemplate. They will be very disruptive and I think we’re beginning to see the signs of it,” Mr Dabalen warned.
