Nigeria’s economy is showing signs of stabilisation following sweeping reforms introduced by President Bola Tinubu, the World Bank said on Wednesday. However, the financial institution warned that millions of Nigerians have been pushed into poverty as a result of the policy adjustments.
Tinubu, who assumed office in 2023, implemented major economic overhauls — including the removal of fuel subsidies and the liberalisation of the foreign exchange market — moves that economists described as long overdue but painful for ordinary citizens.
While the reforms helped avert a fiscal collapse, they also triggered a surge in inflation and a sharp rise in the cost of living across Africa’s largest economy.
According to the World Bank’s bi-annual country development report, inflation has begun to ease, prompting the Central Bank of Nigeria to cut interest rates last month. Despite this progress, food inflation remains a “major concern.”
“Poor households who spend up to 70 percent of their income on food have seen the cost of a basic food basket rise fivefold between 2019 and 2024,” the report noted.
The World Bank estimated that about 61 percent of Nigerians roughly 139 million people now live in poverty, up from 40 percent (81 million people) in 2019. It added that three-quarters of the increase occurred before 2023, but warned that the benefits of Tinubu’s reforms have yet to translate into better living standards.
Despite these challenges, the World Bank expressed cautious optimism about Nigeria’s economic trajectory, noting that the reforms have “prevented an outright fiscal crisis.”
It projected modest growth, rising from 4.2 percent in 2025 to 4.4 percent in 2027, with Nigeria’s economy expanding by 3.9 percent in the first half of 2025 compared to 3.5 percent in the same period last year.
Foreign reserves have climbed to over $42 billion — the highest level since 2019 — while the country’s debt-to-GDP ratio is projected to decline for the first time in a decade, from 42.9 percent to 39.8 percent.
“But macroeconomic stability alone is not enough,” said Mathew Verghis, the World Bank’s Country Director for Nigeria. “The true measure of success will be how these reforms improve the daily lives of Nigerians especially the poor and vulnerable.”
Meanwhile, Nigeria plans to launch a new tax administration system at the start of 2026, which officials say will broaden the tax base while easing the burden on low-income earners and small businesses.
In a recent national broadcast, President Tinubu declared that the country’s economy had “finally turned the corner.”
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