World Bank Projects 4.3% Growth for Nigeria in 2026, Urges Sustained Reforms

The World Bank has projected that Nigeria’s economy will expand by 4.3 per cent in 2026, with annual growth expected to rise to an average of 4.4 per cent between 2027 and 2028, while urging the Federal Government to maintain its economic reform programme.

The projection was contained in the latest edition of the World Bank’s Nigeria Development Update (NDU), released in Abuja, which indicated that sustained reforms could help bring inflation and poverty further down.

“Economic activity in Nigeria is projected to strengthen from 4.0 percent in 2025 to 4.3 percent in 2026, before edging up to 4.4 percent annually in 2027–28,” the bank said.

The institution identified the removal of petrol subsidies and the liberalisation of the foreign exchange market as important measures underpinning the country’s economic outlook.

It urged the government to maintain the reforms to maximise their long-term benefits, amid continuing public debate over fuel subsidy removal ahead of the 2027 general elections.

Some presidential aspirants have pledged to restore the subsidy if elected, making the future of the policy a key issue in discussions about Nigeria’s economic direction.

According to the World Bank, Nigeria’s economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent growth recorded in 2025. Services and agriculture were identified as the main drivers of the expansion.

The bank also projected that inflation would moderate to around 12 per cent by 2028 from approximately 15 per cent, suggesting that price pressures could ease if the current economic trajectory is sustained.

However, the outlook remains dependent on continued policy implementation and the government’s ability to translate economic growth into improved living conditions.

World Bank highlights state revenue gains

Beyond the national outlook, the report noted that state governments recorded a substantial increase in revenue, with collections rising by about 93 per cent in real terms between 2023 and 2025.

The World Bank urged state authorities to improve the efficiency of public spending and channel more resources into human capital development, including areas that can raise living standards and reduce poverty.

It stressed that higher revenue alone would not automatically translate into better welfare outcomes without effective budget implementation and investment in people.

The bank also observed that sub-Saharan Africa’s economy had remained resilient despite geopolitical tensions, climate-related shocks, declining development assistance and mounting fiscal pressures.

The regional outlook, however, continues to face risks from external disruptions and domestic economic constraints, reinforcing the importance of sound fiscal management and policies that support sustainable growth.

Finance minister defends reforms

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, who attended the report’s presentation, described the projections as evidence that the Federal Government’s economic policies were producing results.

He argued that the pace of economic expansion had moved above population growth, expressing optimism that this could contribute to a reduction in poverty.

Oyedele urged Nigerians to support the reforms and allow the government to pursue their intended objectives, maintaining that the decisions were taken in the broader interest of the economy.

The World Bank’s projections offer a positive growth outlook, but the challenge for policymakers will be ensuring that expansion translates into stronger purchasing power, employment opportunities and measurable improvements in household welfare.