The World Bank has stated that the Federal Government of Nigeria’s aspiration to attain single-digit inflation within the short term is impracticable, noting that the country remains among a limited number of African nations still contending with elevated consumer price inflation.
In its latest Africa’s Pulse report, released on Tuesday, the Bank projected that Nigeria, together with Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe, will continue to experience double-digit inflation rates through 2025.
According to the report, while thirty-seven (37) of the forty-seven (47) economies in Sub-Saharan Africa are expected to sustain single-digit inflation levels by 2026, Nigeria is projected to remain an outlier owing to persistent structural vulnerabilities—including continuous currency depreciation, elevated food and energy prices, and supply-side constraints—which continue to exacerbate price instability.
This development contradicts the Federal Government’s optimism that ongoing fiscal and monetary policy reforms, such as foreign exchange market unification, fuel subsidy removal, and the Central Bank of Nigeria’s (CBN) monetary tightening measures, would rapidly reduce inflation to single digits.
Government officials, including the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, and the Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, have repeatedly asserted that these reforms would yield a decline in inflationary pressures within the medium term. During the CBN Governor’s Annual Lecture Series held recently at the Lagos Business School, Mr. Cardoso reaffirmed the Bank’s medium-term objective of achieving single-digit inflation, notwithstanding differing data interpretations by research institutions regarding the National Bureau of Statistics’ reported inflation rate of 20.12 per cent.
However, the World Bank’s analysis indicates that despite a general disinflationary trend across Sub-Saharan Africa, Nigeria remains one of the few countries still entrenched in double-digit inflation, even as regional price growth moderates to historically low levels.
The biannual report, titled “Pathways to Job Creation in Africa,” noted that consumer price inflation across most Sub-Saharan African economies has continued to decline, with the regional median inflation rate dropping from 9.3 per cent in 2022 to 4.5 per cent in 2024, and expected to stabilize between 3.9 and 4.0 per cent in 2025–2026. The number of countries maintaining single-digit inflation rates is projected to rise from twenty-seven (27) in 2022 to thirty-seven (37) by 2026.
Nonetheless, nine (9) countries—Angola, Ethiopia, Ghana, Malawi, Nigeria, São Tomé and Príncipe, Sudan, Zambia, and Zimbabwe—are forecast to continue recording double-digit inflation rates.
Despite global economic headwinds, the World Bank affirmed that Sub-Saharan Africa’s economy remains resilient, with regional growth projected to accelerate from 3.5 per cent in 2024 to 3.8 per cent in 2025, and to an average of 4.4 per cent in 2026–2027. Nigeria’s growth outlook was revised upward by 0.6 percentage points, attributed to a recovery in crude oil production and moderate investment inflows. Nevertheless, the Bank cautioned that sustained inflation continues to impair household welfare and erode business confidence.
The report observed that while economies such as Côte d’Ivoire and Kenya are benefiting from price stability and accommodative monetary policies, Nigeria’s persistent inflationary trend continues to undermine consumer demand and macroeconomic stability. Economists have attributed this condition to a convergence of factors, including currency depreciation, high energy costs, and disruptions in food supply caused by insecurity and logistical inefficiencies.
With over half of Sub-Saharan African countries projected to maintain inflation rates below five per cent in the coming year, Nigeria’s double-digit inflation rate constitutes a notable deviation from regional trends. Countries such as South Africa, Senegal, and Tanzania have successfully anchored inflation within single digits through prudent fiscal management and effective foreign exchange administration.
Andrew Dabalen, the World Bank’s Chief Economist for Africa, stated that “the regional median inflation rate is below four per cent, and most currencies that had previously weakened against the U.S. dollar have since stabilized. Nigeria’s inflation dynamics remain challenging due to exchange rate pass-through effects and structural supply constraints.”
The report further warned that, notwithstanding the region’s resilience, economic growth remains insufficient to generate adequate employment opportunities for its expanding labour force. It noted that Sub-Saharan Africa’s external debt servicing obligations have more than doubled over the past decade, reaching approximately two per cent of GDP in 2024, and that the number of countries at high risk of debt distress has nearly tripled since 2014.
In Nigeria, where unemployment and underemployment persist, heightened inflationary pressures have exacerbated living costs and diminished real income growth. The World Bank, therefore, urged African governments to implement policy measures aimed at reducing the cost of doing business, enhancing human capital development, and strengthening institutional frameworks to attract private investment.
It identified agribusiness, healthcare, housing, tourism, and mining as priority sectors with the highest potential for job creation, emphasizing that each job created within the tourism sector generates approximately 1.5 additional jobs in related industries.
Dabalen concluded, “Over the next twenty-five years, Sub-Saharan Africa’s working-age population will expand by more than six hundred million individuals. The challenge lies in ensuring that these individuals secure productive employment within an environment characterized by stability and opportunity.”#newsafro_
