Structure Of Nigeria’s Economy Can’t Guarantee $1tn GDP By 2030 – World Bank

… Says Finance, ICT Sectors Not Generating Enough Jobs Despite Massive GDP Contribution

… Seeks Massive Investments In Infrastructure, Electricity, Transportation

The World Bank on Monday said that the current structure of Nigeria’s economy cannot support the aspiration of the federal government to grow the size of the economy to $1tn by 2030.

It said that while Nigeria’s macroeconomic situation is improving as a result of sustained reforms, more work needs to be done in improving the infrastructure, particularly in the areas of electricity and transportation, among others.

The Bank said this in the latest edition of the Nigeria Development Update (NDU) report released on Monday.

The NDU further highlights that for the economy to meet the government’s aspiration of achieving a $1tn economy by 2030 and deliver poverty reduction and shared prosperity, the pace of growth needs to accelerate further and its composition rebalanced towards those economic sectors and firms that are most productive, generate positive spillovers, and create jobs and opportunities at scale, especially for the poor and economically insecure.
At present, the World Bank stated that the best-performing sectors of the economy, like finance and ICT, are important drivers of growth but are not sources of mass employment, as many Nigerians do not yet have the skills and opportunities to participate in them.

A private sector-led, public sector-facilitated growth strategy, the bank added, can boost inclusive growth.

The report, titled “Building Momentum for Inclusive Growth”, showed that economic growth in the last quarter of 2024 increased to 4.6 per cent (year-on-year), pushing growth for the full year 2024 to 3.4 per cent, the highest since 2014 (excluding the 2021-2022 COVID-19 rebound).

It said recent reforms have also helped to strengthen the foreign exchange (FX) market and Nigeria’s external position, while the consolidated fiscal position improved in 2024, driven by surging revenues.

The fiscal deficit also shrank from 5.4 per cent of GDP in 2023 to three per cent of GDP in 2024, a major improvement which was driven by a sharp increase in revenues of the entire Federation, which rose from N16.8tn in 2023 (7.2 per cent of GDP) to an estimated N31.9tn in 2024 (11.5 per cent of GDP).

But the report further added that inflation has remained high and sticky, which is expected to fall to an annual average of 22.1 per cent in 2025, as a sustained tight stance firmly establishes monetary policy credibility and dampens inflationary expectations.

The World Bank said the challenge is to consolidate macroeconomic stability and ignite inclusive growth through deeper, wider structural reforms.

It added that there is a need for the economy to generate more and better jobs at scale and reduce poverty.

“Nigeria has made impressive strides to restore macroeconomic stability. With the improvement in the fiscal situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending, investing more in human capital, social protection, and infrastructure.

“The allocation of public resources can begin to shift away from the past unsustainable pattern and rather towards meeting Nigeria’s large development needs, including the government playing its essential role of providing basic public services and serving as an enabler of private sector–led growth,” said Taimur Samad, Acting World Bank Country Director for Nigeria.

The World Bank urged the government to quickly address major infrastructure gaps, such as in electricity and transportation.
It also advocated fostering healthy competition, market openness, and improving the business environment to spur business dynamism.

The Bank also called on the government to improve access to finance for new and existing firms to grow and improve productivity and improve policies in key sectors to help unleash the potential of these sectors.

“International experience suggests that the public sector cannot sustainably generate growth and jobs by itself. Nigeria is no exception, particularly since public resources remain constrained.

“ A useful strategy is to position the public sector to play a dual role as a provider of essential public services, especially to build human capital and infrastructure, and as an enabler for the private sector to invest, innovate, and grow the economy,” said Alex Sienaert, World Bank Lead Economist for Nigeria.

Structure Of Nigeria’s Economy Can’t Guarantee $1tn GDP By 2030 – World Bank is first published on The Whistler Newspaper