By Seun Ibiyemi
The World Bank has called on the Federal Government to adopt prudent fiscal measures by saving oil windfalls, scrapping inefficient subsidy regimes, and strengthening competition in the fuel market to support sustainable economic growth.
This recommendation was made by the World Bank Country Director for Nigeria, Matthew Verghis, during the presentation of the April edition of the Nigeria Development Update (NDU) report in Abuja on Tuesday.
The report, titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,” highlights both the country’s improving economic outlook and its persistent structural challenges.
Verghis noted that while Nigeria’s economy is showing signs of recovery, critical issues such as high inflation and weak early childhood development indicators continue to pose significant risks to inclusive growth and long-term prosperity.
He stressed that oil windfalls should be treated as temporary revenues and partly saved to cushion the economy against future shocks.
According to him, reliance on such volatile income for routine spending exposes the country to fiscal instability.
The country director also criticised blanket subsidy programmes, describing them as inefficient and poorly targeted, with limited benefits for vulnerable populations.
He urged the government to redirect resources toward targeted social support initiatives that directly assist low-income households.
On structural reforms, Verghis emphasised the need to improve efficiency in the downstream petroleum sector by restoring competition.
He recommended reopening fuel imports, reducing tariffs, and removing import bans to lower production and distribution costs.
The report also places strong emphasis on early childhood development as a key driver of Nigeria’s future growth. Verghis described investments in children from pregnancy to age five as critical, noting that this period is essential for brain development and long-term human capital formation.
He revealed that Nigeria’s early childhood indicators remain troubling, with about 110 out of every 1,000 children dying before the age of five, nearly 40 per cent suffering from stunted growth, and over half not developmentally on track before starting school.
“These figures should be treated as a national crisis,” he said, linking the situation to inadequate access to healthcare, nutrition, clean water, and sanitation, particularly among poorer households and in northern regions.
He, however, acknowledged ongoing efforts by the government, supported by development partners, to improve child health and nutrition outcomes.
He added that collaboration with the National Economic Council and state governments is underway to develop a comprehensive national early childhood development programme, with support from partners including the Gates Foundation.
Providing an economic outlook, Fiseha Haile said growth is projected at 4.2 per cent between 2026 and 2028, supported by macroeconomic stabilisation, structural reforms, and increased investment.
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However, Haile warned that global uncertainties, including geopolitical tensions in the Middle East, could affect the outlook, while persistent inflation continues to erode purchasing power.
He called for sustained fiscal discipline, tight monetary and foreign exchange policies, and reforms aimed at reducing trade barriers and supporting vulnerable populations through targeted interventions.
According to him, aligning fiscal prudence with market-oriented reforms will be essential for Nigeria to achieve inclusive growth and ensure that the benefits of economic recovery are widely shared.
