The World Bank has urged Nigeria to overhaul its trade policy, particularly by cutting high import tariffs and lifting import bans, if it hopes to bring down inflation more quickly and stem the rising poverty affecting more than half of its population.
The Washington-based institution noted that while inflation is cooling due to tighter coordination between monetary and fiscal authorities, more must be done to drive down prices. It warned that as long as inflation remains elevated and economic growth lags behind expectations, the purchasing power of Nigerians will remain eroded.
“Inflation needs to come down much faster. Although there’s been real progress, inflation is still very high, particularly food inflation, and this particularly affects the poor,” Mathew Verghis, World Bank’s country director for Nigeria, said in an exclusive interview with BusinessDay on Friday.
Read also: $500m World Bank loan to unlock agribusiness value chains — Kyari
“One set of measures that we suggested could reduce inflation would be measures around trade. Nigeria has both high tariffs and import bans that contribute to keeping prices higher than they need to be and higher than its neighbours.”
Verghis said reducing some of the import tariffs and removing import bans, especially on items that the poor consume, will lower prices, noting that doing the same on items used by manufacturers to produce Nigerian goods would further curb inflation that’s now slowed for the seventh consecutive month to 16 percent in October 2025.
Nigeria currently prohibits the importation of 24 groups of items, including a range of food products, certain medicines, industrial products such as glass bottles and textile fabrics, and consumer products including footwear and furniture.
The use of import prohibitions in Africa’s most populous nation is part of a trade policy regime that seeks to protect existing domestic industries and reduce the country’s perceived dependence on imports, especially on products that the country is deemed capable of producing itself.
But with double-digit inflation, higher than its African peers like Ghana at eight percent and South Africa at less than four percent, Nigeria may need to tweak its trade policy to combat rampant inflation and restore citizens’ spending power after enduring the worst cost-of-living crisis in a generation.
“There are other reasons why inflation might be remaining high. These include high transport costs that make it expensive to bring food from the farms to the market, the cost of energy that contributes to the costs, and the unreliability of it that contributes to the costs of firms.”
Read also: World Bank outlines private investment strategies for Africa
Speaking further, Verghis emphasised that Nigerians will start benefitting from the impact of the reforms introduced by the President Bola Tinubu-led administration when the economy is producing and when there are more productive jobs in the economy.
But this, according to him, will require a further series of reforms aimed at lowering the cost of business, simplifying regulations, easing trade constraints, improving power and transport services, and strengthening competition rules so that medium and small-scale enterprises can succeed.
