The World Bank has released its latest report, “Global Economic Prospect: Subdued Growth, Multiple Challenges,” projecting a growth rate of 3.7% for Nigeria’s Gross Domestic Product (GDP) in 2025.

This marks an improvement from the previously projected 3.3% for 2023, indicating positive momentum in the country’s macro-fiscal reforms.

ALSO READ: World Bank allocates $5.m loan to finance ministry for stationery and procurement of various items

The report highlights the impact of President Bola Tinubu’s initiatives, such as fuel subsidy removal and foreign exchange rate harmonization, with a focus on infrastructure, manufacturing, and technology.

The World Bank identifies agriculture, construction, services, and trade as key drivers of Nigeria’s economic growth.

The bank acknowledges the recent challenges faced by the Nigerian economy, citing disruptions caused by the currency demonetization policy in 2023, which replaced old high-denomination naira notes.

However, it anticipates a gradual easing of inflation as the effects of last year’s exchange rate reforms and fuel subsidy removal fade.

Despite the positive growth forecast, concerns linger over rising public debt, persistent inflation, a high cost of living, and a weak business environment, posing potential risks to Nigeria’s economic prospects.

The country’s inflation hit a 21-year high of 28.92% in December 2023, and public debt rose to N87.91 trillion in the third quarter of the same year.

ALSO READ: Economic expert suggests Nigeria’s GDP could be valued at $600b

The United Nations’ ‘World Economic Situation and Prospects 2024’ report also highlights challenges for African countries, projecting deteriorating fiscal positions due to high public debt and a low domestic revenue base in 2023.

Efforts to enhance in-country oil refining capacity are expected to reduce domestic fuel costs, while energy subsidy reforms in Nigeria, Angola, and Gambia, along with tax hikes in Kenya, Ghana, and South Africa, aim to address fiscal challenges.