By DAYO ADESULU
Nigeria Among Few African Nations Still Battling Double-Digit Inflation
The World Bank has said that the Federal Government’s ambition to achieve single-digit inflation in the short term is unrealistic, warning that Nigeria remains one of only a few African countries still grappling with high consumer prices.
In its latest report titled Africa’s Pulse, released on Tuesday, the Bretton Woods institution projected that Nigeria, alongside Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, São Tomé and Príncipe, and Zimbabwe, will continue to experience double-digit inflation through 2025.
While 37 out of 47 African economies are expected to maintain single-digit inflation by 2026, Nigeria stands out as an outlier, weighed down by currency depreciation, high food and energy prices, and chronic supply bottlenecks.
Government’s Reform Optimism Faces Global Reality Check
The report challenges the Federal Government’s optimism that its recent fiscal and monetary reforms—including foreign exchange unification, fuel subsidy removal, and the Central Bank’s tightening measures—would quickly bring inflation under control.
Top government officials, including the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, and the Governor of the Central Bank of Nigeria, Olayemi Cardoso, have consistently projected a return to single-digit inflation in the near term.
At the CBN Governor’s Annual Lecture held last week at the Lagos Business School, Cardoso reiterated that the bank’s medium-term target was single-digit inflation. “The idea is to ensure that, in the medium term, we achieve single-digit inflation,” he said.
However, the World Bank’s projections suggest otherwise, stating that despite a general slowdown in inflation across Sub-Saharan Africa, Nigeria remains trapped in double-digit territory.
Inflation Easing Across Africa — But Not in Nigeria
According to the report, titled “Pathways to Job Creation in Africa,” inflation across Sub-Saharan Africa has fallen sharply—from a median of 9.3 per cent in 2022 to 4.5 per cent in 2024—and is expected to stabilise around 4 per cent by 2026.
The Bank noted that almost 60 per cent of African nations have seen consumer price growth slow from last year. Yet, within that group, Nigeria remains among nine nations projected to maintain double-digit inflation.
“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,” the report stated.
Structural Weaknesses Fuel Inflationary Pressure
Economists blame Nigeria’s inflation crisis on currency instability, energy costs, and food supply disruptions worsened by insecurity and poor logistics.
Despite an upgraded growth forecast of 0.6 percentage points—driven by a modest rebound in oil production—the World Bank warned that inflation remains a key drag on household welfare and investor confidence.
The Bank’s Chief Economist for Africa, Andrew Dabalen, described Nigeria’s case as a reflection of exchange rate pass-through and structural bottlenecks, saying, “The median inflation in the region is less than four per cent. Nigeria’s situation remains challenging because of exchange rate pressures and supply constraints.”
Africa’s Broader Economic Outlook Remains Positive
The World Bank maintained that Sub-Saharan Africa’s economy remains resilient despite global challenges. It forecast 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 by 2026–2027.
Still, it cautioned that this growth is not translating into enough jobs for the region’s fast-growing youth population. “Over the next quarter century, Sub-Saharan Africa’s working-age population will grow by more than 600 million. The challenge is ensuring these people find better jobs in an environment of stability and opportunity,” Dabalen added.
Outlook: Inflation Pain May Persist for Nigerians
For Nigeria, the combination of rising prices, slow income growth, and high unemployment continues to erode living standards. With other African peers successfully curbing inflation through disciplined fiscal management, Nigeria’s double-digit inflation remains a troubling anomaly.
The report urged governments, especially Nigeria’s, to focus on cutting business costs, building human capital, and strengthening institutions to attract long-term private investment.
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