World Bank predicts drop in Nigeria’s inflation to 24.8% before year-end

The World Bank has projected a significant drop in Nigeria’s inflation rate to 24.8 percent year-on-year in 2024.

The country’s inflation currently stands at 31.7 percent as of February.

The Bretton Wood institution gave the projection in its April 2024 edition of Africa’s Pulse, a biannual survey of African economies.
The report read: “Inflation is cooling in most Sub-Saharan African economies but remains high. The median inflation in the region is projected to fall from 7.1 percent in 2023 to 5.1 percent in 2024 and 5 percent in 2025–26.

“The normalization of global supply chains, steady decline of commodity prices, and impacts of monetary tightening and fiscal consolidation are contributing to a lower rate of inflation in the region.

“Although inflation is receding in most countries in 2024, it remains high compared to pre-pandemic levels: inflation is projected to decrease in about 80 percent of African countries compared with 2023, but it is still higher than pre-pandemic levels in 32 of 37 countries.

“Moreover, 14 countries in the region still exhibit persistently high levels of inflation (two or more digits) this year—with a median inflation rate that has dropped modestly from 25.9 percent in 2023 to 24.8 per cent in 2024.”

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The report highlighted various factors contributing to the decline, including the normalization of global supply chains, a steady decline in commodity prices, and the effects of monetary tightening and fiscal consolidation.

While acknowledging the reduction in inflation across Africa compared to 2023, the World Bank emphasized that it remains high compared to pre-pandemic levels.

It noted that 14 countries on the continent still experience persistently high levels of inflation, with a median inflation rate dropping modestly from 25.9 percent in 2023 to 24.8 percent in 2024.

The World Bank also reaffirmed its projection of 3.3 percent economic growth for Nigeria in 2024, with a slight adjustment in the projections for 2025 to 2026.

It stressed the importance of macroeconomic and fiscal reforms in driving sustainable growth, particularly in the non-oil sector.

By: Babajide Okeowo

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