World Bank says Nigeria seeing positive results from economic reforms

The World Bank says Nigeria is seeing positive results from the economic reforms by President Bola Tinubu’s administration.

Alex Sienaert, World Bank’s lead economist, spoke on Thursday at the launch of the Nigeria Development Update (NDU) report in Abuja.

The report is titled ‘Staying the Course: Progress Amid Pressing Challenges’.

Sienaert said Nigeria’s fiscal deficit has reduced from 6.2 percent in the first half of last year to 4.4 percent in the first half of this year.

He said the reforms have led to robust growth in service sectors, stability in the oil sector, and improvements in the foreign exchange market.

“We are seeing a fiscal consolidation underway with the fiscal deficit shrinking from 6.2% of GDP in the first half of last year to 4.4% in the first half of this year and that’s driven by a combination of expenditure being roughly constant in real terms, and revenues which are surging,” Sienaert said.

“This surge in revenues is largely due to the removal of the implicit FX subsidy that was happening before, which was even larger than the petrol subsidy, which we talk a lot about.”

Indermit Gill, senior vice-president of the World Bank Group, on October 15, said Nigeria must maintain its current reforms for the next 10 to 15 years to transform its economy.

He said the reforms are critical for ensuring long-term growth and enabling Nigeria to compete with other emerging economies in sub-Saharan Africa and globally.

Gill said although implementing the reforms will be challenging, it is essential to persevere to achieve the desired results.

On May 29, 2023, the president announced the removal of petrol subsidy, which has increased transportation and production costs.

Additionally, the Central Bank of Nigeria (CBN) also announced the unification of all segments of FX markets on June 19.

Also, on April 3, the Nigerian Electricity Regulatory Commission (NERC) increased the electricity tariff for Band A customers, to reduce the federal government’s subsidy obligation.