Nigeria's Economic Growth Forecast Reduced by World Bank to 4.1 Percent in 2026
The World Bank has adjusted its economic growth projection for Nigeria downward to an average of 4.1% in 2026, a 0.3 percentage point reduction from its previous forecast. This revision is outlined in the bank's latest Africa Economic Update, which highlights the ongoing structural constraints hindering Nigeria's economic expansion. The report notes that while macroeconomic conditions are stabilizing and investment is recovering, the country's growth remains susceptible to various threats.
One of the primary drivers of Nigeria's growth is expected to be the services sector, particularly the Information and Communication Technology (ICT), finance, and real estate sectors. These sectors are projected to remain the primary engines of growth, while the agriculture and industrial sectors are expected to expand at a slower pace. The report also forecasts a decline in inflation, from 23% in 2025 to 10.7% by 2028, reflecting the impact of recent policy tightening and improved supply conditions.
However, the World Bank warns that poverty levels remain elevated, and may decline only gradually due to high fuel prices linked to ongoing global conflicts. The report also highlights several factors that continue to threaten the growth momentum, including commodity price volatility, tighter global financial conditions, persistent security concerns, and capital flow volatility. Furthermore, policy uncertainty in the lead-up to the 2027 general elections remains a significant concern for the country's economic stability.
The World Bank's revised forecast for Nigeria is in line with its adjusted projections for several other major economies in the region, including South Africa, Angola, and Kenya. Despite these adjustments, the report notes that many countries in the region are benefiting from improved macroeconomic stabilization, better inflation control, and stronger domestic currencies, which are helping to support private consumption and investment.
The World Bank's Africa Economic Update provides valuable insights into the economic trends shaping the region. The report highlights the need for policymakers to address the structural constraints hindering growth, including improving the business environment, investing in human capital, and promoting economic diversification. By understanding these challenges, policymakers can develop targeted strategies to support economic growth and reduce poverty levels in Nigeria and across the region.
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