Nigeria economy grows 3.8% this year

The World Bank has raised its growth forecast for sub‑Saharan African economies, including Nigeria, to 3.8 % for this year, citing stable prices and easing monetary policies. This upgrade follows the Central Bank of Nigeria’s recent decision to cut interest rates from 27.5 % to 27 %. The bank’s biannual Africa Pulse report also lifted growth expectations for Ethiopia and the Ivory Coast, pointing to stabilising foreign‑exchange and inflation rates.

According to the report, real incomes in the region are set to grow faster this year and over the next two years. However, the rebound has yet to gain strong momentum after a decade of successive shocks. Growth is projected to accelerate to an annual average of 4.4 % in the next two years, up from an earlier forecast of 4.3 %. The World Bank attributes the improved outlook to favourable conditions such as low inflation—median rates are below 4 %—and recovering currencies, most of which have regained value against the US dollar. Andrew Dabalen, chief economist for Africa at the World Bank, said these factors are driving a recovery in private consumption and investment.

Despite the positive signs, the regional outlook faces several risks, including trade uncertainty, high debt burdens and the pressing need to create jobs for millions of young people entering the labour market. The World Bank warns that fiscal consolidation efforts could slow the recovery in some economies. It urges governments to focus on generating quality jobs by improving the business environment and supporting small and mid‑sized firms. Job creation is a critical challenge, as three‑quarters of employment in the region’s economies is informal. A lack of opportunities has sparked youth‑led protests in countries such as Kenya, Nigeria and Madagascar.

The World Bank stresses that addressing these issues is essential to avoid disruption and ensure economic stability. With the regional economy showing signs of recovery, policymakers must prioritise job creation and sustainable growth to secure a stable future.