World Bank flags Nigeria’s single-digit inflation target as unrealistic amid widespread corruption and macroeconomic instability
By Jeph Ajobaju, Chief Copy Editor
Abuja’s quest for single-digit inflation in the short term has been laughed off as unrealistic by the World Bank, which warns that Nigeria is stuck among African countries still grappling with high consumer price inflation.
The latest ‘Africa’s Pulse’ report released by the World Bank projected that Nigeria, Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe, will continue to record double-digit inflation rates through 2025.
It said 37 of Africa’s 47 economies are projected to maintain single-digit inflation by 2026 but Nigeria is an outlier due to persistent structural challenges, including currency depreciation, high food and energy prices, and supply bottlenecks that stoke up price instability.
This contradicts optimism expressed by the Federal Government that its fiscal and monetary reforms – touted as foreign exchange (FX) unification, fuel subsidy removal, and policy tightening measures by the Central Bank of Nigeria (CBN) – would soon drive inflation down to single digits.
Top administration officials, particularly Finance Minister Wale Edun and CBN Governor Olayemi Cardoso, have repeatedly assured the public that ongoing fiscal and monetary reforms would help dip inflation to single digits in the near term.
A single-digit inflation rate remains the medium-term target, Cardoso reiterated at the CBN Governor’s Annual Lecture Series at the Lagos Business School, held in Lagos last week.
“The idea is to ensure that in the medium term we achieve single-digit inflation,” Cardoso said.
Government insistence stems from argument by some research organisations that National Bureau of Statistics (NBS) data, which puts the country’s headline inflation at 20.12 per cent, overestimates the general price level.
The World Bank noted that despite a broad wave of disinflation sweeping across Sub-Saharan Africa (SSA), Nigeria remains trapped in double-digit inflation, even as price growth across the region slows to historic lows.
The report is released every six months, and the latest is titled, “Pathways to Job Creation in Africa.”
It said: “Consumer price inflation has continued to recede across most Sub-Saharan African countries, albeit at varying speeds. After peaking at 9.3 per cent in 2022, the region’s median inflation rate declined to 4.5 per cent in 2024 and is projected to stabilize between 3.9 and 4.0 per cent annually over 2025–26.
“The number of countries in the region with single-digit inflation rates has increased from 27 in 2022 to 37 in 2025–26.
“In 2025, nearly 60 per cent of Sub-Saharan African countries have experienced a slowdown in consumer price inflation from last year. However, within this group, nine countries, Angola, Ethiopia, Ghana, Malawi, Nigeria, São Tomé and Príncipe, Sudan, Zambia, and Zimbabwe, are still expected to record double-digit inflation rates.”
The World Bank said economy in SSA countries is resilient despite global economic headwinds, projecting regional growth to accelerate from 3.5 per cent in 2024 to 3.8 per cent in 2025, and an average 4.4 per cent in 2026–27.
Nigeria’s growth forecast is upgraded 0.6 percentage points, one of the strongest revisions among major economies in the region, driven by a rebound in oil production and modest investment flows. But the bank warned that inflation remains a key drag on household welfare and business confidence.
“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.”
Economists attribute Nigeria’s price pressures to a combination of currency depreciation, high energy costs, and food supply disruptions worsened by insecurity and poor logistics.
With more than half of SSA countries expected to maintain inflation rates below 5 per cent in 2026, Nigeria’s double-digit figure stands out as an anomaly in the region.
South Africa, Senegal, and Tanzania have all managed to anchor inflation within single digits, aided by disciplined fiscal policies and efficient FX management.
“The median inflation in the region is less than four per cent. Moreover, most currencies that were cratering relative to the US dollar have now recovered and are stable,” said Andrew Dabalen, the World Bank Chief Economist for Africa.
“Nigeria’s situation remains challenging because of exchange rate pass-through and structural supply bottlenecks.”
The World Bank also cautioned that despite the region’s economic resilience, growth is insufficient to create enough decent jobs for its expanding labour force.
“External debt service has more than doubled over the past decade, reaching two per cent of GDP in 2024,” the report said. “The number of Sub-Saharan African countries at high risk of debt distress has nearly tripled since 2014.”
For Nigeria, where unemployment and underemployment persist, the inflation surge has worsened living standards and dampened real income growth.
The report urged African governments to prioritise policies that reduce the cost of doing business, build human capital, and strengthen institutions to attract private investment.
It identified agribusiness, healthcare, housing, tourism, and mining as sectors with the highest job-creation potential, noting that every job created in tourism spurs 1.5 additional jobs in related sectors.
“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 that these people find better jobs in an environment of stability and opportunity.”
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