World Bank says Nigeria single-digit inflation target is unrealistic despite reforms, warning inflation will remain in double digits through 2025

Nigeria single-digit inflation target has been deemed unrealistic by the World Bank, which warned in its latest Africa’s Pulse report that the country will likely remain trapped in double-digit inflation through 2025, despite ongoing fiscal and monetary reforms.

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The report, released on Tuesday, placed Nigeria among nine Sub-Saharan African nations — including Angola, Ghana, Ethiopia, Malawi, and Zimbabwe — expected to struggle with high inflation over the next year, citing currency depreciation, high food and energy costs, and structural bottlenecks.

This assessment contradicts the optimism shown by senior Nigerian officials who maintain that recent reforms — such as fuel subsidy removal, FX unification, and interest rate hikes — would steer inflation towards single digits in the near term.

At a recent lecture at Lagos Business School, CBN Governor Olayemi Cardoso reiterated that a single-digit inflation rate remains a medium-term target.

Likewise, Finance Minister Wale Edun had previously expressed confidence in the government’s policy direction.

However, the World Bank disagrees.

“Despite a broad wave of disinflation sweeping across Sub-Saharan Africa, Nigeria remains one of the few outliers with persistent inflation,” the report said.

While median inflation in the region dropped to 4.5% in 2024 and is projected to stabilise around 4% in 2025–2026, Nigeria’s consumer price pressures remain stubbornly high.

According to the National Bureau of Statistics, Nigeria’s headline inflation was 20.12% at last count — a figure some economists believe understates the true cost of living.

Although Nigeria’s economic growth forecast was upgraded by 0.6 percentage points, driven by rising oil output and investment inflows, the World Bank warned that inflation continues to erode household welfare and business confidence.

In contrast, countries like Ivory Coast, Senegal, and South Africa have anchored inflation within single digits, largely due to stronger fiscal discipline and better FX management.

“Nigeria’s situation remains challenging because of exchange rate pass-through and structural supply bottlenecks,” said Andrew Dabalen, Chief Economist for Africa at the World Bank.

The World Bank also highlighted the link between inflation and Nigeria’s worsening employment crisis.

As prices soar, real incomes stagnate, and labour market opportunities shrink, deepening poverty and social discontent.

The report noted that while Sub-Saharan Africa remains broadly resilient, economic growth across the region is not creating enough decent jobs.

Nigeria, with its growing working-age population, faces even greater risks if structural reforms fail to improve productivity and investment.

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The Bank identified agribusiness, healthcare, housing, tourism, and mining as high-potential sectors for job creation, but warned that current inflationary trends could deter private investment without strong macroeconomic management.