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World Bank: Nigeria's food prices are a burden but the economy is growing.

The World Bank released a report on Wednesday that said Nigeria had made progress in stabilizing the economy with recent policy reforms, but needed to do more in order to improve living conditions and address the soaring prices of food.

The report of the bank highlighted improvements in economic growth, revenue mobilisation and external balances since Nigeria eliminated its fuel subsidies, devalued naira and reform taxes. It warned, however, that food inflation was high and poverty widespread.

Africa's largest economy expanded by 3.9% in the first six months of 2025 compared to 3.5% during the same period in 2018. This was driven by growth in non-oil and service sectors as well as a rebound in agriculture and oil production. Foreign reserves grew to $42 billion while the current account surplus increased to 6.1% GDP. This was due in part, but not exclusively, because of stronger non-oil imports and a reduction in oil imports.

Nigeria's projected fiscal deficit in 2025 is 2.6% of GDP, a level that is largely unchanged from 2024, despite lower oil prices. The public debt is projected to fall for the first time since over a decade. It will drop from 42.9% of GDP to 39.8%.

Mathew Verghis is the World Bank's Country Director in Nigeria.

The true measure of success is how these reforms will improve the lives of Nigerians, especially the poor and the vulnerable.

Cost of a basic basket of food has risen five-fold since 2019. This is disproportionately impacting poor households who spend up to 70 percent of their incomes on food.

The World Bank has recommended that urgent action be taken in three areas. These include removing trade barriers, addressing bottlenecks along the supply chain to reduce food inflation, improving fiscal transparency, aligning public expenditures with development goals and enhancing social protection by implementing regular cash transfers funded domestically and crisis-responsive safety networks.

The World Bank predicts that Nigeria's economy is expected to grow by 4,2% by 2025 and by 4,4% by 2027. This growth will be driven by the services sector and supported by agriculture, non-oil industries, and supported by agricultural and other sectors. The inflation rate is expected to remain high but ease slowly.

Samer Matta is the World Bank Senior Economist in Nigeria. (Reporting by Chijioke Ohuocha Editing by Alexandra Hudson)

(source: Reuters)