AfDB lauds Nigeria's economic reforms, says results are emerging

Zawya

28-05-2025

The African Development Bank (AfDB) has praised the Nigerian government's recent economic reforms, stating that the measures introduced since May 2023 are beginning to yield tangible results.
The commendation came as part of the Bank's African Economic Outlook 2025, released during its ongoing Annual Meetings in Abidjan on Tuesday.
According to the report on Nigeria's economic reforms, the country's economy is showing signs of recovery and renewed growth momentum, driven largely by structural reforms across key sectors. The services sector led the way, contributing approximately 75 percent to the country's Gross Domestic Product (GDP) growth. Industry followed, accounting for 13 percent of GDP expansion, fueled by a 2.8 percent increase in oil production, which reached 1.56 million barrels per day in 2024.
The agricultural sector also made a notable contribution of 9 percent to GDP growth, supported by competitive domestic pricing that spurred production. However, the report noted that domestic demand remained subdued due to inflationary pressures triggered by higher prices.
'Market-determined petrol prices rose by 77 per cent, while the naira depreciated by 42 per cent in 2024. These factors significantly contributed to inflation, which climbed to 33.2 percent in 2024, compared to 24.7 per cent the previous year,' the report stated.
To combat inflation, the Central Bank of Nigeria (CBN) raised its monetary policy rate to 27.5 percent, a decisive move aimed at tightening liquidity and stabilizing the economy.
Despite the inflationary environment, fiscal performance improved marginally. The fiscal deficit dropped to 3.9 percent of GDP in 2024, slightly down from 4.0 percent in 2023, driven mainly by increased non-oil revenue. However, the report flagged a concerning rise in public debt, which surged to 52.3 percent of GDP, up from 41.5 percent in 2023. This increase was attributed to a weaker currency and higher government borrowing.
On the external front, Nigeria recorded a substantial improvement in its current account balance. The surplus rose to 9.2 per cent of GDP in 2024, up from 1.6 per cent in 2023, aided by reduced import volumes as higher global prices curtailed demand.
The financial services sector also showed resilience, with several institutions initiating recapitalization efforts in line with Nigeria's ambition of becoming a trillion-dollar economy. Financial stability improved, as reflected in the decline of non-performing loan ratios to 4.1 percent by mid-2024, from 4.4 percent in 2023.
Meanwhile, the AfDB President, Dr. Akinwumi Adesina, while speaking earlier at the annual meetings, reflected on his decade-long leadership of the Bank, which began in 2015. He described his tenure as 'a consuming yet profoundly fulfilling mission,' highlighting the institution's record-breaking achievements under his watch.
Key milestones of Adesina's presidency include increasing the Bank's capital base from $93 billion to $318 billion, overseeing the largest-ever replenishment of the African Development Fund at $8.9 billion, and delivering programs that have impacted over 565 million people across the continent.
He also emphasised the lasting impact of the Bank's 'High 5s' strategic priorities: Light Up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and Improve the Quality of Life for the People of Africa. These initiatives, Adesina said, have helped unlock opportunities and transform lives across Africa.
'These are not just figures—they are futures. They are hopes realized,' he declared.
As Nigeria continues to navigate the complex terrain of economic reform, the AfDB's endorsement of the country's progress offers a strong vote of confidence. With continued policy consistency and effective implementation, the report suggests Nigeria is well-positioned to strengthen its economic resilience and achieve sustainable, inclusive growth in the years ahead.