World Bank Urges Nigeria to Rebuild Fiscal Buffers

The World Bank has released a report stressing the urgent need for Nigeria to rebuild its fiscal buffers in light of rising uncertainties in the global economy, particularly due to the escalating conflict between Israel and Iran, which has implications for global energy markets and inflation. The report highlights that oil prices could exceed $110 per barrel, significantly impacting Nigeria's budget, which is based on a benchmark price of $65.

Nigeria's fiscal deficit is projected to widen slightly to 3.1% of GDP by 2025, although it remains lower than pre-reform years. The report also notes that Nigeria's economy is expected to grow by 4% in 2024, driven mainly by the services sector.

The World Bank recommends a mix of policies for Nigeria to manage oil windfalls, reduce inflationary pressures, and maintain fiscal discipline. It emphasizes the importance of investing in human capital development, particularly in early childhood, to improve living standards and job creation.