The World Bank has stated that the best-performing sectors of the economy, like finance and ICT, are important drivers of growth but are not sources of mass employment, as many Nigerians do not yet have the skills and opportunities to participate in them.
It said this in its latest Nigeria Development Update released on Monday.
The report, titled “Building Momentum for Inclusive Growth,” reveals that Nigeria’s economic growth surged to 4.6% year-on-year in the fourth quarter of 2024, raising full-year GDP growth to 3.4% the highest since 2014, excluding the post-COVID rebound.
The NDU also highlighted a remarkable fiscal turnaround.
The nation’s consolidated fiscal deficit narrowed from 5.4% of GDP in 2023 to 3.0% in 2024.
This shift was largely driven by a significant increase in revenues, which rose from N16.8 trillion (7.2% of GDP) in 2023 to an estimated N31.9 trillion (11.5% of GDP) in 2024.
While inflation remains high, the report projects it will ease to an annual average of 22.1% in 2025, owing to a tighter monetary policy stance that is reinforcing the credibility of the Central Bank and dampening inflation expectations.
“Nigeria has made impressive strides to restore macroeconomic stability. With the improvement in the fiscal situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending; investing more in human capital, social protection, and infrastructure,” said Taimur Samad, Acting World Bank Country Director for Nigeria.
He added, “The allocation of public resources can begin to shift away from the past unsustainable pattern, and rather towards meeting Nigeria’s large development needs, including the government playing its essential role of providing basic public services and serving as an enabler of private sector led growth.”
Despite recent gains, the report emphasizes the need for deeper reforms to sustain momentum and promote inclusive growth.
The World Bank stressed that for Nigeria to achieve its $1 trillion economy target by 2030 and effectively reduce poverty, economic growth must accelerate and shift toward sectors that are labor-intensive and widely beneficial.
At present, sectors like finance and ICT are leading growth but offer limited employment opportunities, especially for unskilled and economically vulnerable populations.
To address this, the report proposes a private sector led, public sector facilitated growth strategy anchored on four pillars:
Tackling infrastructure deficits, particularly in electricity and transportation, Enhancing market competition and business conditions, Expanding access to finance for businesses and Reforming key sectors to unlock their full economic potential.
“International experience suggests that the public sector cannot sustainably generate growth and jobs by itself. Nigeria is no exception, particularly since public resources remain constrained,” said Alex Sienaert, World Bank Lead Economist for Nigeria.
“A useful strategy is to position the public sector to play a dual role as a provider of essential public services especially to build human capital and infrastructure and as an enabler for the private sector to invest, innovate, and grow the economy,” Sienaert added.
The Nigeria Development Update underlines the critical moment facing the country as it builds momentum toward inclusive, long-term prosperity.