World Bank Hails Nigeria’s Economic Reforms but Warns of Worsening Poverty Levels
By Joseph Iyaji | Akahi News
The World Bank has commended Nigeria’s ongoing economic reforms under President Bola Ahmed Tinubu’s administration, noting that the policies are beginning to deliver positive macroeconomic outcomes. However, the Bank cautioned that the benefits of these reforms have not yet filtered down to ordinary Nigerians, as poverty and food insecurity continue to deepen across the country.
According to Akahi News, the development was contained in the latest Nigeria Development Update (NDU) report released on Wednesday in Abuja, titled “From Policy to People: Bringing the Reform Gains Home.” The comprehensive document assessed Nigeria’s recent economic performance and proposed policy priorities to ensure that current reforms translate into sustainable and inclusive growth.
Growth Strengthens Despite Economic Headwinds
The World Bank report revealed that Nigeria’s economy expanded by 3.9 per cent year-on-year in the first half of 2025, up from 3.5 per cent in the corresponding period of 2024. This growth, the Bank said, was fuelled by improved performance in services, agriculture, non-oil industries, and oil production, marking a gradual recovery in economic activity after years of volatility.
Akahi News gathered that Nigeria’s external reserves have climbed above $42 billion, while the current account surplus increased to 6.1 per cent of GDP, reflecting a stronger external position. Fiscal indicators also showed relative stability, with the federal budget deficit remaining broadly unchanged at 2.6 per cent of GDP despite lower oil prices.
The World Bank further highlighted that public debt has declined from 42.9 per cent to 39.8 per cent of GDP, representing the first drop in over a decade—a development widely interpreted as evidence of fiscal prudence and improved debt management.
Gains Not Yet Felt by Citizens
Despite the macroeconomic progress, the World Bank emphasised that these achievements have not yet translated into improved living standards for millions of Nigerians. The report warned that inflationary pressures, particularly on food, continue to erode household purchasing power and push more citizens below the poverty line.
“The Nigerian government has taken bold steps to stabilise the economy, and these efforts are beginning to yield results,” said Mathew Verghis, the World Bank Country Director for Nigeria. “But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians—especially the poor and vulnerable.”
Akahi News reports that food prices have remained persistently high, with the cost of a basic food basket rising fivefold between 2019 and 2024. As a result, millions of households continue to struggle with access to affordable nutrition and basic necessities, despite encouraging economic indicators.
Three Urgent Priorities for Nigeria
The World Bank’s latest assessment identified three key policy priorities that the Nigerian government must urgently address if it hopes to convert reform gains into meaningful human development outcomes.
- Tackling Food Inflation:
The report urged the government to dismantle trade barriers and resolve structural challenges within the agricultural and logistics sectors. Improving rural infrastructure and reducing post-harvest losses, it said, will help stabilise prices and boost food availability. - Enhancing Public Spending Efficiency:
Nigeria must strengthen budget transparency and accountability to ensure that fiscal resources are effectively channelled toward social and productive investments. According to Akahi News, the Bank emphasised that leakages and waste in public expenditure continue to undermine service delivery. - Expanding Social Protection Systems:
The World Bank called for the institutionalisation of regular, domestically financed cash transfers and social safety nets to cushion vulnerable households from economic shocks. The Bank noted that reliance on donor-funded programmes is unsustainable in the long run.
Food Inflation Remains the “Biggest Tax on the Poor”
In his remarks, Samer Matta, the World Bank’s Senior Economist for Nigeria, said that while the nation’s economic outlook is cautiously optimistic—with growth expected to rise from 4.2 per cent in 2025 to 4.4 per cent in 2027—inflation remains a formidable challenge.
“Food inflation remains the biggest tax on the poor,” Matta stated, urging the Federal Government and the Central Bank of Nigeria (CBN) to maintain monetary discipline and pursue structural reforms that promote inclusive recovery.
He warned that unless inflation is decisively tackled, economic stability will remain fragile, and the benefits of reforms will bypass the majority of Nigerians.
Policy Implications and the Road Ahead
According to Akahi News, the World Bank’s report signals cautious optimism for Nigeria’s economic trajectory under President Tinubu’s reforms. However, experts agree that the government must now shift focus from macroeconomic gains to microeconomic realities, ensuring that growth translates into jobs, affordable food, and poverty reduction.
The NDU report also reinforces the need for consistent policy implementation, effective coordination among fiscal and monetary authorities, and a deeper commitment to transparency and accountability in governance.
As the global financial institution concluded, Nigeria stands at a critical juncture: the policy groundwork for recovery has been laid, but inclusive growth remains the ultimate test of reform success.
Akahi News will continue to monitor Nigeria’s economic progress, policy outcomes, and the direct impact of reforms on citizens’ livelihoods.
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