The World Bank has described Nigeria’s short-term ambition to achieve single-digit inflation as unrealistic, noting that the country will remain among a small group of African economies struggling with high consumer prices through 2025.
In its latest Africa’s Pulse report, released on Tuesday, the Bank projected that Nigeria, alongside Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe, will continue to record double-digit inflation rates next year.
According to the report, 37 out of 47 African economies are on track to maintain single-digit inflation by 2026, leaving Nigeria an outlier due to persistent currency depreciation, rising food and energy costs, and supply bottlenecks that continue to fuel price instability.
This outlook contradicts the Federal Government’s optimism that ongoing fiscal and monetary reforms—such as the foreign exchange unification, fuel subsidy removal, and the Central Bank’s tightening measures—would quickly lower inflation to single digits.
“The idea is to ensure that in the medium term we achieve single-digit inflation,” a government official said recently.
However, the World Bank’s analysis suggests otherwise, emphasizing that while inflation is easing across Sub-Saharan Africa, Nigeria remains trapped in a high-inflation cycle.
The biannual report, titled “Pathways to Job Creation in Africa,” noted:
“After peaking at 9.3% in 2022, the region’s median inflation rate declined to 4.5% in 2024 and is projected to stabilize between 3.9% and 4.0% in 2025–26. Yet, nine countries—including Nigeria—are expected to maintain double-digit inflation.”
Despite this challenge, Sub-Saharan Africa’s economy is showing resilience. The Bank projects regional growth to rise from 3.5% in 2024 to 3.8% in 2025, reaching 4.4% by 2026–27.
Nigeria’s growth forecast received one of the largest upward revisions, gaining 0.6 percentage points, driven by a rebound in oil production and modest investment inflows. Still, inflation remains a major constraint on household welfare and business confidence.
“While countries like Côte d’Ivoire and Kenya are benefiting from price stability and easing monetary conditions, Nigeria’s inflation trajectory continues to undermine consumer demand and macroeconomic stability,” the report stated.
Economists attribute Nigeria’s stubborn inflation to exchange rate volatility, high energy prices, and disruptions in food supply worsened by insecurity and poor logistics.
With more than half of Sub-Saharan countries projected to keep inflation below 5% next year, Nigeria’s double-digit inflation stands out as an anomaly. Nations such as South Africa, Senegal, and Tanzania have already anchored prices through disciplined fiscal management and stable foreign exchange systems.
“Nigeria’s situation remains challenging because of exchange rate pass-through and structural supply bottlenecks,” said Andrew Dabalen, the World Bank’s Chief Economist for Africa.
The Bank also cautioned that, despite resilience, the region’s growth remains too slow to absorb the growing labour force. External debt service in Africa has more than doubled in the past decade, and the number of countries at high risk of debt distress has nearly tripled since 2014.
In Nigeria, rising inflation has eroded real incomes, worsened poverty, and undermined job creation. The report urged governments to focus on reducing the cost of doing business, building human capital, and attracting private investment.
It identified agribusiness, healthcare, housing, tourism, and mining as sectors with the strongest job-creation potential, noting that every job created in tourism generates 1.5 additional jobs in related industries.
“Over the next 25 years, Sub-Saharan Africa’s working-age population will grow by more than 600 million,” Dabalen said. “The challenge is ensuring these people find better jobs in an environment of stability and opportunity.”
