The World Bank has downgraded Nigeria’s economic growth projection to an average of 4.1 percent in 2026.
In October 2025, World Bank projected Nigeria’s economy will
grow by 4.4 percent in 2026 and 2027.
The projection for 2027 was also downgraded to 4.2 percent,
while the growth forecast for 2028 was put at 4.3 percent.
In its April 2026 Africa Economic Update titled ‘Making
Industrial Policy Work in Africa,’ released on Wednesday, the global lender
said the growth forecast is driven by more stable macroeconomic conditions and
a gradual recovery in investment.
The bank said the services sector particularly ICT, finance,
and real estate will remain the primary engine of growth, while agriculture and
industry are expected to expand more slowly due to structural constraints.
The institution also said inflation is projected to decline
from 23 percent in 2025 to 14.9 percent in 2026, and further ease to 10.7
percent by 2028, reflecting the lagged impact of policy tightening and
improving supply conditions.
“Although poverty remains elevated, it is expected to
decline gradually as inflation eases, albeit more slowly due to higher fuel
prices linked to the Middle East conflict,” World Bank said.
“Rising oil prices could support fiscal and external
balances, partly offset by capital flow volatility amid global uncertainty.
“However, business sentiment and reform momentum may be
dampened by commodity price by commodity price volatility, tighter global
financial conditions, security concerns, and policy uncertainty ahead of the
2027 elections.”
‘SUB-SAHARAN AFRICA FACES SLOWER ECONOMIC GROWTH’
World Bank said economic activity in sub-Saharan Africa is
projected to grow by 4.1 percent in 2026, unchanged from 2025.
The global lender said the 2026 growth forecast for the
region has been downgraded by 0.3 percentage points compared to its October
2025 projection.
“Across countries in the region, some large countries in the
region have been revised downward in 2026; notably, Angola, Kenya, Mozambique,
Nigeria, Senegal, South Africa, and Zambia,” the report said.
“Overall, about 60 percent of the countries in the region
(29 of 47) recorded downward revisions to their 2026 growth forecasts.”
Despite the downgrade, the World Bank said economic activity
across the region has been supported by improved macroeconomic stabilisation,
including better inflation control, stronger domestic currencies, and easing
fuel and food prices.
“These developments have helped bolster private consumption
and investment, while enhanced policy frameworks are strengthening credibility
and resilience,” the report said.
The bank added that higher commodity prices, particularly
precious metals and beverages, have supported export earnings and government
revenues, while trade performance has remained resilient despite persistent
global tensions.
However, the World Bank warned that the gains are being
tested by rising external risks, especially the escalating conflict in the
Middle East, which could trigger higher energy prices, disrupt trade, and renew
inflationary pressures.
From the expenditure side, the report said growth in 2026 is
expected to be driven largely by private consumption and investment.
The Bretton Woods institution said household consumption is
projected to contribute 1.6 percentage points to GDP growth, down from 1.8
percent in 2025,while investment is expected to contribute 1.0 percent, up from
0.9 percent.
On the production side, World Bank said the services sector
is forecast to account for about half of total growth, with finance, ICT,
wholesale and retail trade, and tourism leading economic activity.
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