From Adanna Nnamani, Abuja
The World Bank has issued a warning regarding Nigeria’s economic trajectory, suggesting that the current growth rate may be insufficient to achieve the federal government’s goal of transforming the nation into a $1 trillion economy by the year 2030.
This cautionary insight was unveiled in the latest Nigeria Development Update (NDU) report, titled “Building Momentum for Inclusive Growth,” which was released on Monday.
The World Bank stressed that to reach the ambitious economic milestone the country’s economy must grow by five times of what it is currently.
“The pace of growth in Nigeria needs to accelerate further to meet its aspirations and deliver poverty reduction and shared prosperity. The economy would need to grow at a rate about five times higher than recently to achieve a US$1 trillion economy by 2030, the government’s aspiration,” the World Bank stated.
While Nigeria’s Gross Domestic Product (GDP) recorded a growth of 3.84% in the fourth quarter of 2024, as reported by the National Bureau of Statistics (NBS), the World Bank said that this rate falls significantly short of what is required to effectively reduce poverty, generate jobs, and foster long-term prosperity. The report noted that both the speed of growth and the inclusivity of that growth are critical factors for success.
“To succeed, the economy has to grow at a faster pace, but also in a more inclusive way. Not only must the economy grow faster, but it also needs to grow in such a way as to generate jobs and opportunities for the Nigerians who need it most: the poorest and least prosperous,” the report said.
Notably, while sectors such as finance and information and communication technology (ICT) are among the top performers in Nigeria’s economy, the World Bank cautioned that these areas alone are inadequate for driving mass employment. Although they contribute significantly to GDP growth, they do not provide widespread job opportunities, particularly for youth and low-skilled workers.
The report advocates for a rebalancing of Nigeria’s growth strategy towards labor-intensive sectors that can create broader economic opportunities. Agriculture, manufacturing, and services aimed at domestic consumption were highlighted as essential for this transformation. These sectors possess the potential to engage a significant portion of the labour force while ensuring a more equitable distribution of income across the country.
In terms of policy implications, the World Bank acknowledged the bold reforms undertaken by President Bola Tinubu’s administration, including the removal of fuel subsidies and exchange rate unification. However, it warned however, that without an accelerated structural transformation and enhanced governance, the benefits of these reforms may not be fully realized.
In light of these challenges, President Tinubu, during the Nigeria Economic Summit in 2023, expressed optimism, stating that a $1 trillion economy is achievable by the end of the decade in 2030. However, analysts such as Bismarck Rewane, Managing Director of Financial Derivative Company, have voiced skepticism, predicting that the administration’s ambitious goal may not be attainable within the next five to six years.
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