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Overview

  • A key regional player in West Africa, Nigeria accounts for about half of West Africa’s population with approximately 202 million people and one of the largest populations of youth in the world. With an abundance of natural resources, it is Africa’s biggest oil exporter, and has the largest natural gas reserves on the continent.

    Political context

    Nigeria is a multi-ethnic and culturally diverse federation which consists of 36 autonomous states and the Federal Capital Territory. The political landscape is partly dominated by the ruling All Progressives Congress party (APC) which holds 217 out of 360 seats at the National Assembly; 64 out of 109 seats in the Senate; and 19 out of 36 State Governors.

    Muhammadu Buhari secured a second term at the 2019 presidential elections, while the results were contested by the main opposition party the People’s Democratic Party (PDP). Since 2011, the Nigerian security landscape has been consistently shaped by the war against Boko Haram terrorist group in the northern states. This adds to a lasting crisis in the oil-rich Niger Delta, where several non-state armed groups attack oil companies and state-owned pipelines.

    Economic overview

    Nigeria is highly vulnerable to the global economic disruption caused by COVID-19, particularly due to the pronounced decline in oil prices and spikes in risk aversion in global capital markets. Nationally, 40 percent of Nigerians (83 million people) live below the poverty line, while another 25 percent (53 million) are vulnerable. With COVID-19, many of these 53 million vulnerable people could fall into poverty. The magnitude of the health impact depends on the duration and the domestic spread of the outbreak, while the economic impact hinges on oil prices. Oil accounts for over 80 percent of exports, a third of banking sector credit, and half of government revenues. Oil prices also affect growth in non-oil industries and services, with additional pressures arising from foreign portfolio investors’ reassessment of risks and domestic liquidity management.

    The macroeconomic situation is more challenging now than in 2015-2016, when oil prices fell sharply and Nigeria experienced its first recession in 25 years. In the current situation, Nigeria has fewer buffers and policy instruments to cushion adverse effects. The Excess Crude Account is depleted, external reserves are highly reliant on short-term flows, and policy uncertainty affects investor confidence. Before the 2016 recession, Nigeria’s economy was growing fast at 6.3%. By contrast, before COVID-19 struck, the economy was growing at 2.2%. Inflation was in single digits in 2014, compared to about 12% in 2019. The general government fiscal deficit was 4.4% of GDP in 2019, compared to 1.8% in 2014.

    Unemployment and underemployment are expected to increase, affecting poor households and increasing the share of the population vulnerable to falling into poverty. Only agriculture is expected to positively contribute to growth in 2020.

    Development Challenges

    While Nigeria has made some progress in socio-economic terms in recent years, its human capital development remains weak due to under-investment. It ranked 152 of 157 countries in the World Bank’s 2018 Human Capital Index. The country continues to face massive developmental challenges, including the need to reduce the dependency on oil and diversify the economy, address insufficient infrastructure, build strong and effective institutions, as well as address governance issues and public financial management systems. These pre-existing structural challenges have left the Nigerian economy especially vulnerable to the COVID-19 outbreak and its consequences.

    Inequality, in terms of income and opportunities, remains high and has adversely affected poverty reduction. The lack of job opportunities is at the core of the high poverty levels, regional inequality, and social and political unrest. Without the COVID-19 shock (the counterfactual scenario), about 2 million Nigerians were expected to fall into poverty in 2020 as population growth outpaces economic growth. With COVID-19, the recession is likely to push an additional 5 million Nigerians into poverty in 2020, bringing the total newly poor to 7 million this year.

    Last Updated: Nov 03, 2020

  • The World Bank Group enjoys a strong partnership with Nigeria through a strategy to support the government in its development’s objectives to end extreme poverty and increase shared prosperity. Consultations have concluded on a new Country Partnership Framework, which will come into effect in late 2020.

    The outgoing Country Partnership Strategy period (FY2014-FY2019) had an investment of $8.8 billion through the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD). Nigeria is also one of the International Finance Corporation’s (IFC) fastest growing portfolio and represents IFC’s fifth largest global country exposure, with a committed volume of $1.8 billion as at FY2020. 

    The World Bank Group’s support for Nigeria is structured around several priorities that promote diversified growth and job creation, with a focus on youth, women, and the poor in marginalized areas, and social inclusion, through higher quality and efficiency in social service delivery at the state level. It also aims at fostering macroeconomic resilience and advancing structural reforms for private sector-led, non-oil growth. This includes agricultural productivity and increased access to finance. The Bank Group also supports increased engagement in the climate resilient agenda as well as Nigeria’s response to the COVID-19 pandemic and its post-recovery efforts.

    In conflict-affected North-East Nigeria, the Bank Group is stepping up its support to address service delivery gaps, livelihood deficits, and social cohesion issues, as well as providing support to economic diversification. 

    Last Updated: Nov 03, 2020

  • AGRICULTURE: The World Bank’s support for the agricultural sector, including through the Commercial Agriculture Development Project, the Transforming Irrigation and Water Resources Management Project and West Africa Agriculture Productivity Project—has helped Nigeria strengthen agricultural production:

    •  Over 7 million farmers received improved agricultural technology

    •  Farmers cultivating tomatoes and rice contributed 26% and 14.27%, to national production respectively, in 2019

    •  Cassava farmers realized more than $55 million as revenue and a gross margin of over $36 million in 2019

    •  Rice, sorghum and tomatoes farmers realized gross margins of over $288 million, $169 million, and $53 million respectively

    •  A Farmers’ Microfinance Bank birthed from FADAMA gives loans at low interest rate of 3.5% for business startup and expansion, with 80% recovery rate. The amount saved from the FADAMA enterprises was over $200,000 as at 2019

    •  Export of over 10,000 metric tons of smoked fish and other Agric-products

    •  3,102 hectares received improved irrigation services through the ongoing rehabilitation of 3 dams located in Sokoto, Zamfara and Kano states under the Transforming Irrigation Management in Nigeria project

     

     

    CLIMATIC RESILIENCE: The Nigeria Erosion and Watershed Management enhanced Nigeria’s capacity on the preparedness to respond to natural hazards, climate risks and natural disasters, which has led to the following;

    •   About 2,201 hectares of the land area have been reclaimed in the immediate gully site micro-catchments as at June 2020, including reclamation and afforestation programs across northern states

    •    16 States now have improved erosion risk maps, towards ensuring better-quality catchment management plans prepared for 31 sites across States.

    •   75 hydromet stations providing data for integrated catchment planning have been installed across the country

    •  2 stormwater master plans have been completed for Onitsha in Anambra State, Aba and Abakaliki in Ebonyi State, strengthening and streamlining the country's Environmental Impact Assessment process

    •  Issuance of Nigeria’s second tranche of Sovereign Green Bond (for $42 million) after the first green bond, to finance climate change activities. Activities financed by the initial tranche of Green Bonds, such as solar plants in seven selected Federal Government Universities and a Renewable Energy Micro-Utility project in Torankawa community in Sokoto State, have been completed

     

    SOCIAL SAFETY NET: The Community and Social Development Project has

    •  Led to Institutionalization of Community & Social Development Agencies across implementing states, which serves as a platform for program sustainability by state government or further interventions by other donor partners

    •  Recorded over 3 million direct project beneficiaries including Internally displaced persons in the North East of Nigeria

    •  4,662 new communities and over 1.8 million households have access to social services (of which IDPs constitute more than 10% of residents) as against 1,000 communities and 500,000 households baseline values respectively

    •  800 new poor communities with access to natural resource management services (of which IDP’s constitute more than 10% of residents)

    •  Over 1,510 rehabilitated and 256 newly built health centers

    •  Over 2,362 rehabilitated and 300 newly built classrooms

    •   Increased school enrollment with records of over 18,000 Boys and 14,000 Girls enrolled in primary education schools

    •   An estimated 36 million people in 13,299 cluster of communities have benefitted directly and indirectly from the original and additional Financing resources

     

    The National Social Safety Net Project has:

    •  Created a National Social Registry (NSR) for Nigeria

    •  Captured about 814,376 households included in the National Social Registry and recorded about 3.2 million Direct Project Beneficiaries of the program, 49% of this number are female

    •   By June 2019, almost a million poor and vulnerable households in the NSR had benefitted from 10,000 Naira bi-monthly Conditional Cash Transfer program; expected to reach 1 million poor and vulnerable households by end of 2019

    •   Benefitted 20 states from targeted cash transfers

    •   Helped 1,200 beneficiaries from 30 communities save more than 22 million naira in 18 months from their conditional cash transfers. This fund is being used as start-up capital for small businesses to generate income and improve their livelihood. 

    Last Updated: Nov 03, 2020

  • The WBG is an active partner in donor coordination. Partners in Nigeria include: African Development Bank (AFDB); Canadian International Development Agency (CIDA); European Union (EU); French Development Agency (AFD); German Agency for International Development (GIZ); German Development Bank—KfW; International Monetary Fund (IMF); Islamic Development Bank; Japan International Cooperation Agency (JICA); UK Department for International Development (DfID); United States Agency for International Development (USAID); Bill & Melinda Gates Foundation; and the Agencies of the United Nations, particularly the UNDP and UNICEF. 

    Last Updated: Nov 03, 2020

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LENDING

Nigeria: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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