By Seun Ibiyemi
The World Bank has projected that Nigeria’s debt as a share of its Gross Domestic Product (GDP) will decline in 2025, marking the first such reduction in over a decade.
The Washington-based institution attributes this optimistic outlook to stronger economic growth and a more stable exchange rate.
According to its latest Nigeria Development Update report, titled “From Policy to People: Bringing the Reform Gains Home,” the country’s debt-to-GDP ratio is expected to fall sharply from 49.2 percent in 2024 to 39.8 percent in 2025.
Furthermore, the critical debt service-to-revenue ratio is anticipated to drop to levels not seen in several years, confirming that fiscal resilience, stronger growth, and exchange rate appreciation have helped ease debt pressures.
The projection comes despite the fact that Nigeria’s total public debt had surged by ₦27.72 trillion to ₦149.39 trillion as of the first quarter of 2025, largely due to the weak naira ballooning the country’s external obligations.
However, a growth rate that rose to a five-year high of 4.23 percent in the second quarter and a stable naira throughout the year are expected to significantly reduce the overall debt burden.
Separately, the World Bank stated that Sub-Saharan Africa’s economy remains resilient, with growth projected to accelerate to 3.8 per cent in 2025, up from 3.5 per cent in 2024. This acceleration reflects easing inflationary pressures and a modest recovery of investment, despite persistent global economic uncertainty.
The Bank highlighted that the number of countries experiencing double-digit inflation has fallen sharply from 23 in October 2022 to just 10 in July 2025, signaling progress in stabilizing prices across the continent.
However, significant downside risks loom, including declining investor appetite, global trade policy uncertainty, and a shrinking pool of external finance.
The region faces a severe debt crisis: external debt service has more than doubled over the past decade, reaching two percent of GDP in 2024.
The number of Sub-Saharan African countries in or at high risk of debt distress has nearly tripled, rising from eight in 2014 to 23 in 2025, accounting for almost half of the region.
The World Bank noted that current growth rates are insufficient to meaningfully reduce extreme poverty or create the quantity and quality of jobs needed for the rapidly growing labour force. Africa is experiencing the world’s largest and fastest demographic shift, and to harness this opportunity, countries must accelerate growth that delivers high-quality jobs—a central theme of the 32nd edition of Africa’s Pulse, the World Bank’s biannual economic update.
Andrew Dabalen, World Bank Chief Economist for the Africa Region, stressed the urgency, saying, “Over the next quarter century, Sub-Saharan Africa’s working-age population would grow by more than 600 million.”
He added that the challenge lies in matching this growing population with better jobs, given that only 24 per cent of new workers today secure wage-paying positions.
The World Bank outlined a set of policy priorities to stimulate large-scale job creation, including reducing the cost of doing business through improved infrastructure and human capital development, strengthening institutions and governance to curb corruption, and stimulating private sector development in high-potential sectors like agribusiness, mining, tourism, healthcare, and construction.