The World Bank has downgraded Nigeria’s economic growth outlook for 2026, citing mounting domestic and global risks despite signs of macroeconomic stabilization.
In its April 2026 Africa Economic Update titled “Making Industrial Policy Work in Africa,” the global lender revised Nigeria’s projected growth to 4.1 percent for 2026, down from its earlier estimate of 4.4 percent issued in October 2025. The bank also trimmed projections for subsequent years, forecasting 4.2 percent growth in 2027 and 4.3 percent in 2028.
The report noted that Nigeria’s economic expansion will continue to be driven largely by the services sector, with information and communication technology (ICT), finance, and real estate leading the charge. However, growth in agriculture and industry is expected to lag due to persistent structural constraints.
On inflation, the bank offered a cautiously optimistic outlook, projecting a decline from 23 percent in 2025 to 14.9 percent in 2026, with further moderation to 10.7 percent by 2028. This trend is expected to be supported by tighter monetary policies and improving supply conditions.
Despite these gains, the World Bank warned that Nigeria faces significant headwinds, including policy uncertainty in the lead-up to the 2027 general elections, security challenges, and volatility in global commodity markets. While higher oil prices could bolster government revenues, they may also amplify fiscal vulnerabilities.
Regionally, the bank projected that sub-Saharan Africa will grow by 4.1 percent in 2026 but highlighted widespread downward revisions across major economies, including Nigeria, Angola, Kenya, Mozambique, Senegal, South Africa, and Zambia.
“Overall, about 60 percent of countries in the region recorded downward revisions to their 2026 growth forecasts,” the report stated.
While improved inflation control, stronger currencies, and easing food and fuel prices have supported consumption and investment, the bank cautioned that escalating global tensions particularly conflicts in the Middle East could disrupt trade flows, drive up energy costs, and reignite inflationary pressures.
ELIJAH ADEYEMI
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