From Victor Osula, Abuja
The World Bank has cautioned that Nigeria’s ambition to achieve single-digit inflation in the near term is unrealistic, warning that persistent price pressures will continue to burden micro, small and medium enterprises (MSMEs) and households.
In its latest Africa’s Pulse report, the Bank observed that while inflation has eased across much of Sub-Saharan Africa, with median rates falling from 9.3% in 2022 to 4.5% in 2024, Nigeria is projected to remain in double digits through 2026.
The World Bank’s Chief Economist for Africa, Andrew Dabalen, said Nigeria’s inflation outlook is being worsened by exchange rate volatility and structural supply constraints, which continue to push up the cost of goods and services.
The report noted that ongoing economic reforms, including the removal of fuel subsidies and the unification of the foreign exchange market, may yield positive outcomes in the long term but are unlikely to bring immediate relief.
It warned that sustained inflation would further raise production costs for MSMEs, erode household purchasing power, and stifle growth and job creation.
The Bank also cited rising debt service obligations and weak output growth as additional risks facing Africa’s largest economy.
While Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and Central Bank Governor, Olayemi Cardoso, have expressed confidence that current policy interventions will soon tame inflation, Dabalen stressed that Nigeria’s situation remains complex.
He said, “Nigeria’s case is particularly challenging because of exchange rate pass-through and structural supply bottlenecks.
“Whereas most currencies that were depreciating against the US dollar have stabilised, Nigeria still faces unique pressures.”
The World Bank urged the Federal Government to intensify efforts to reduce the cost of doing business, support MSMEs, and channel investments into sectors such as agriculture, housing, healthcare, tourism, and mining to drive sustainable growth and resilience.
