The World Bank has said that the persisting hike in food prices is undermining the significant progress the Nigerian government has made to stabilise the country’s economy through its recent policy reforms, urging the authorities to do more to improve living standards and tackle soaring food prices.
It pointed at this in its latest report, ‘October 2025 Nigeria Development Update (NDU)’, released on Wednesday, October 8.
Themed ‘From Policy to People: Bringing the Reform Gains Home’, the report highlights progress in economic growth, revenue mobilisation, and external balances following fuel subsidy removal, naira devaluation, and tax reforms.
The Bretton Woods financial institution noted that high food inflation and widespread poverty continued to weigh heavily on households.
Commenting on the October 2025 NDU report, its Senior Economist for Nigeria, Samer Matta, reportedly said Nigeria’s inflation is expected to gradually ease but remain elevated, requiring sustained monetary discipline and structural reforms to tackle food prices, the “biggest tax on the poor”.
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Matta noted that the outlook for Nigeria’s economy remains cautiously optimistic.
Pinnacle Daily reported recently that Nigerians continue to lament the untold hardship they are facing as prices of foodstuffs remain on the rooftop.
Nigeria’s economy to grow by 4.4% in 2027
The World Bank forecasted that Nigeria’s economy will grow by 4.4 per cent in 2027, compared to its 4.2 per cent projection for this year.
The growth will be driven by services and supported by agriculture and the non-oil industry.
According to the World Bank in its NDU report, Nigeria’s economy expanded by 3.9 per cent year-on-year in the first half of 2025, up from 3.5 per cent in the same period of 2024.
“Growth was driven by strong performance in services and non-oil industries, alongside improvements in oil production and agriculture,” the report said.
“The country’s external position has strengthened, with foreign reserves exceeding $42 billion and the current account surplus rising to 6.1% of GDP, supported by higher non-oil exports and lower oil imports.
“On the fiscal side, despite lower oil prices, the federal deficit is projected at 2.6% of GDP in 2025, broadly unchanged from 2024, while public debt is expected to decline for the first time in over a decade — from 42.9% to 39.8% of GDP,” it stated.
It, however, cautioned that the macroeconomic gains have yet to translate into tangible improvements in people’s lives, adding that many households continue to face hardship, with poverty and food insecurity remaining high.
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The international institution noted that Nigeria’s poor households, who spend up to 70 per cent of their income on food, have seen the cost of a basic food basket rise fivefold between 2019 and 2024, highlighting the need for continued efforts to reduce inflation and support the vulnerable.
How Nigeria can tackle food inflation
The World Bank identified three urgent priorities to bridge the gap between macroeconomic progress and improved welfare.
It said the priorities include tackling food inflation by removing trade barriers and addressing structural bottlenecks, improving public spending efficiency through fiscal transparency and discipline, and expanding social protection for the ultra-poor.
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“Tackling food inflation by removing trade barriers such as import bans and excessive duties while addressing structural bottlenecks in seeds, input supply, security, logistics, and infrastructure (including transport, power, storage, and cold chains),” the NDU noted.
Another measure is improving the efficiency of public spending through greater fiscal transparency, stronger discipline in Federation Account (FAAC) deductions, and a national pact to align fiscal policy with development objectives, especially human capital investments.
It also suggested expanding and institutionalising social protection, including regular, domestically financed cash transfers for the ultra-poor and a shock-responsive safety net system to help households manage crises.
According to the Country Director for Nigeria, Mathew Verghis, the Nigerian government has taken bold steps to stabilise the economy, and the efforts are beginning to yield results.
However, Verghis added, “But macroeconomic stability alone is not enough. The true measure of success will be how these reforms improve the daily lives of Nigerians — especially the poor and vulnerable.”
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
