The World Bank has cast doubt on Nigeria’s target of achieving single-digit inflation in the near term, describing it as “unrealistic” given the country’s persistent structural and policy challenges.
In its latest Africa’s Pulse report released on Tuesday, the Bank noted that Nigeria remains one of a small group of African economies still trapped in double-digit inflation — a contrast to the wider trend of disinflation across Sub-Saharan Africa.
According to the report, inflation is expected to remain in double digits in nine countries — including Nigeria, Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe — through 2025.
Meanwhile, 37 of the region’s 47 economies are projected to maintain single-digit inflation by 2026.
The report attributes Nigeria’s persistent inflation to currency depreciation, high food and energy costs, and supply bottlenecks.
These factors, it said, continue to offset the effects of fiscal and monetary tightening by the Central Bank of Nigeria (CBN).
This assessment contradicts the Nigerian government’s optimism that ongoing reforms — such as the unification of foreign exchange rates, removal of fuel subsidies, and tighter monetary policy — would quickly push inflation to single digits.
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During the CBN Governor’s Annual Lecture Series at Lagos Business School last week, CBN Governor Olayemi Cardoso reaffirmed that achieving single-digit inflation remains a medium-term target, despite current headwinds.
“The idea is to ensure that, in the medium term, we achieve single-digit inflation,” he said.
However, the World Bank’s findings suggest that Nigeria’s inflationary pressures are more deep-rooted.
While the region’s median inflation rate declined from 9.3% in 2022 to 4.5% in 2024 — and is expected to stabilize around 4% by 2026 — Nigeria’s price growth remains stubbornly high.
“While countries like Ivory Coast 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 said.
Despite this, the World Bank raised Nigeria’s growth forecast by 0.6 percentage points, citing a modest rebound in oil production and rising investment flows. Sub-Saharan Africa as a whole is projected to expand by 3.8% in 2025, up from 3.5% in 2024.
The Bank’s Chief Economist for Africa, Andrew Dabalen, emphasized that while inflation across the continent is cooling, Nigeria’s exchange rate volatility and structural bottlenecks continue to exert inflationary pressure.
“Nigeria’s situation remains challenging because of exchange rate pass-through and structural supply constraints,” he said.
The report also cautioned that despite the region’s economic resilience, growth remains insufficient to absorb Africa’s rapidly expanding labor force.
External debt servicing, it noted, has more than doubled in the past decade, while the number of countries at high risk of debt distress has tripled since 2014.
For Nigeria, the persistence of high inflation, unemployment, and currency weakness has further eroded household welfare and purchasing power. Economists warn that unless supply-side reforms deepen and exchange rate stability improves, inflation will continue to hinder growth.
Still, the World Bank identified sectors such as agribusiness, healthcare, housing, tourism, and mining as key drivers of job creation.
“Over the next quarter century, 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.”
