• Nigeria’s GDP grew 3.4% in 2024, the strongest since 2014, excluding COVID rebound years.

• Oil, gas, and services led the growth, while agriculture and manufacturing stayed weak.

• Reforms helped rebuild foreign reserves and cut the budget deficit to 3% of GDP.

Nigeria recorded its strongest economic growth in ten years in 2024, reaching 3.4% according to the World Bank. The growth was fueled by a solid fourth quarter and improved public finances, helped by reforms introduced under President Bola Tinubu.

In a report released in Abuja on May 12, the World Bank said the economy expanded by 4.6% year-on-year in the last quarter of 2024. This is the highest annual growth rate since 2014, excluding the temporary post-COVID rebound in 2021 and 2022.

The growth surge came mainly from better performance in the oil and gas industry and the services sector.

Oil and gas saw their first annual growth since 2019, with production rising by 5.5% in 2024. Crude oil and condensate output averaged 1.6 million barrels per day, up 7.4% from 2023.

The services sector remained the biggest contributor to GDP, expanding by 4.7% over the year.

However, the non-oil sector posted modest growth. Manufacturing remained sluggish at 1.4%, unchanged from 2023. The sector continues to face serious hurdles such as high costs for imported inputs, limited access to credit, unreliable electricity, and expensive transportation. Agriculture, held back by ongoing insecurity in major farming areas, grew only 1.2% in 2024.

The World Bank credited several reforms for the improved fiscal position. These included ending costly fuel subsidies, reducing electricity subsidies, unifying exchange rates, and devaluing the naira twice. As a result, official foreign reserves rose above $37 billion.

Public revenue also increased by 4.5% of GDP in 2024, described by the World Bank as a “remarkable outcome.” This was driven by the removal of forex subsidies, better tax collection, and an uptick in remittances from Nigerians abroad. These gains helped reduce the budget deficit from 5.4% of GDP in 2023 to 3% in 2024.

Despite the progress, Nigeria still faces high and persistent inflation. The World Bank said strict monetary and fiscal discipline would be needed to maintain macroeconomic stability.

Looking ahead, the challenge is to translate this stability into broad-based, inclusive growth. This means Nigeria must create more and better jobs to reduce poverty, which still affects nearly half the population.

“Nigeria has made impressive strides to restore macroeconomic stability. With the improvement in the fiscal situation, Nigeria now has a historic opportunity to improve the quantity and quality of development spending; investing more in human capital, social protection, and infrastructure,” said Taimur Samad, acting World Bank country director for Nigeria.

He added that the government must now shift away from unsustainable spending models of the past and focus instead on delivering basic public services and driving private-sector-led growth.