About 30 months into President Bola Ahmed Tinubu’s 48-month tenure, one of the Bretton Woods institutions — The World Bank — has begun to sing discordant tunes with Nigeria in respect of the country’s economic trajectory. Where the Tinubu administration is seeing some light at the end of the tunnel, the World Bank seems to be seeing pitch darkness; and goes ahead to warn about more cloudy days ahead.
Whereas President Tinubu said in his October 1, 2025 independence anniversary address that “The worst is over”, the World Bank is seeing gloomier times ahead for Nigeria. Specifically, while the federal government is getting euphoric about attaining a single-digit inflation rate soon, the World Bank insists that such an ambition was unrealistic, warning that “Nigeria remains among a handful of African countries still grappling with high inflation.”
In its latest Africa’s Pulse report released on Tuesday, October 7, 2025, the Bank projected that Nigeria alongside Angola, Ethiopia, Ghana, Malawi, Sudan, Zambia, Sao Tome and Principe, and Zimbabwe “will continue to record double-digit inflation rates through 2025-2026.” The report revealed that while 37 of Africa’s 47 economies are projected to maintain single-digit inflation by 2026, “Nigeria remains an outlier due to persistent structural challenges, including currency depreciation, high food and energy prices, and supply bottlenecks that continue to fuel price instability.”
However, contrary to this position, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), at a recent lecture at Lagos Business School, said a single-digit inflation rate remained the apex bank’s short-to-mid-term target. Wale Edun, minister of finance and coordinating minister of the economy, had similarly assured Nigerians that ongoing fiscal and monetary reforms would bring inflation down to single digit in the near term.
Apparently, the recent declines in Nigeria’s rate of inflation could be more a reflection of the desperation of the leadership of the fiscal and monetary authorities to arrive at a single digit target, than the reality — as depicted by the World Bank. Thus, Nigeria’s inflation rate which hit almost 35 percent at end-December 2024, has been made to drop to about 20 percent by end-September 2025. In pursuit of the pre-determined single digit inflation, the National Bureau of Statistics (NBS) had to rebase the Consumer Price Index (CPI); and since then (January 2025) has been recording a consistent drop in CPI.
In point of fact, for over two years now, the CBN has adopted and maintained a very tight monetary stance, mainly to ‘fight’ high inflation. This stance has been seen in high Monetary Policy Rate (MPR), hiked Cash Reserve Ratio (CRR), among others, deployed by the apex bank. But rather than crashing the CPI, these initiatives have only been attracting some ‘hot money’ via foreign portfolio investments (FPIs) to the detriment of most local deficit spending units (DSUs) who badly need funds to thrive.
This shrinking of access to funds has not only gotten many micro, small and medium-scale enterprises (MSMEs) asphyxiated, but also added much to the cost of doing business in Nigeria — and contributed to the exit of not a few businesses in recent times. Put differently, the unintended upshots of the federal government’s reforms have turned lethal pains to numerous economic agents.
In this regard, the World Bank, too, has raised an alarm that about 139 million citizens are now living in poverty, despite Nigeria’s recent economic stabilisation efforts, warning that the country risked losing ‘reform gains’ if they fail to translate into tangible improvements in people’s welfare.
Mathew Verghis, the World Bank country director for Nigeria, expressed this worry in Abuja at the launch of the October 2025 Nigeria Development Update titled: “From Policy to People: Bringing the Reform Gains Home.” Verghis recounted the outcomes of Nigeria’s reform efforts in the past two years, and cautioned that “these macroeconomic improvements had yet to translate into improved living conditions for ordinary Nigerians.
“Despite these stabilisation gains, many households are still struggling with eroded purchasing power. Poverty, which began to rise in 2019 due to policy missteps and external shocks such as COVID-19, has continued to increase even after the reforms. In 2025, we estimate that 139 million Nigerians live in poverty,” he said. Notably, this new figure is a sharp increase from 129 million recorded in April 2025 and 87 million in 2023, reflecting the worsening hardship among households.
The World Bank chief said: “The challenge is clear: to translate the gains from the stabilisation reforms into better living standards for all. These are not abstract ideas but practical steps that can turn macro stability into better livelihoods.”
Even as President Tinubu was celebrating the macro-economic stability feat in his October 1 address, another of the Bretton Woods institutions — The International Monetary Fund (IMF), slammed the federal government’s revenue generation and management methods. The IMF says that Nigeria’s budgeting process would continue to suffer from a deep-seated “optimism bias,” an entrenched tendency to overestimate revenue potential despite chronic underperformance in actual collections.
The IMF in its selected papers titled, ‘Fiscal Forecasting Errors in Nigeria,’ said that recent analyses comparing 16 economies across Eastern and Southern Africa reveal that Nigeria records the largest average revenue forecast errors, underscoring a long-standing challenge that has far-reaching implications for fiscal credibility, public spending efficiency, and economic stability.
Driven by optimism, year after year, Nigeria’s budget projections assume that the federal government would generate more income than it actually can — a mismatch between revenue ambition and fiscal reality. This has led to many capital projects being abandoned midway or stalled, or executed at substandard levels. “Such outcomes not only distort fiscal priorities but also deepen public disillusionment with the government’s promises,” the IMF said.
Unfortunately, this has become the ‘budget culture’ in Nigeria, reflecting in every one of President Tinubu’s addresses becoming another manifesto full of promises. It has also led to the complication of having three annual budgets being implemented simultaneously: some parts of 2023, 2024, and 2025. Perhaps, the IMF’s stinker will be an eye opener for the government to begin to adjust to reality. Enough of ‘budget padding’ and bloated revenue projections.
Marcel Okeke, a practising economist and consultant in Business Strategy & Sustainability based in Lagos, is a former Chief Economist at Zenith Bank Plc. He can be reached at: obioraokeke2000@yahoo.com; +2348033075697
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