The African Development Bank (AfDB) says Nigeria’s economic growth is projected to decline to 3.7 percent in 2027 due to the anticipated drop in global oil prices and reduced external revenue inflows.
The projection is contained in the latest 2026 African
Economic Outlook (AEO) released on Thursday at the bank’s annual meetings in
Brazzaville, Congo.
The AfDB said growth in Nigeria is expected to rise
marginally from an estimated 4 percent in 2025 to 4.1 percent in 2026 before
decelerate in 2027.
“Growth in Nigeria, the region’s largest economy, is
projected to increase marginally from an estimated 4.0 percent in 2025 to 4.1
percent in 2026, supported by increasing oil prices and production, growth in
the services sector, and increased public investment on electricity, transport,
and logistics,” AfDB said.
“In 2027, growth is projected to decelerate to 3.7 percent
on account of the anticipated easing of global oil prices and thus reduced
external revenue inflows.”
The report also warned that achieving sustained and
inclusive growth across Africa would require a significant increase in
investment and stronger mobilisation of domestic resources.
“Africa must raise annual growth to 7 percent or higher,
sustained over decades, to enable large-scale job creation and accelerated
poverty reduction,” the AfDB said.
‘AFRICA NEEDS $1.3 TRILLION YEARLY TO SUSTAIN GROWTH, REDUCE
POVERTY’
According to the report, the continent faces an annual
development financing gap of more than $1.3 trillion needed to achieve the
sustainable development goals (SDGs).
The bank, however, said Africa could unlock up to $1.43
trillion annually by addressing inefficiencies in resource mobilisation and
utilisation.
“With appropriate reforms, Africa could unlock up to $1.43
trillion in additional annual financing, more than its estimated annual
development financing gap of $1.3 trillion,” the report said.
The AfDB said nearly $469 billion remains untapped annually
due to weaknesses in tax compliance, tax administration, and policy design
across African countries.
The organisation said more than 40 percent of public
investment is currently lost to inefficiencies, noting that closing the gap
could generate as much as $299 billion yearly for growth-enhancing investments.
The bank also said shallow and fragmented financial markets
across the continent continue to limit the mobilisation of domestic savings and
their allocation to productive sectors.
The report highlighted priorities for strengthening Africa’s
financial architecture to include deeper capital markets, improved regulation,
and greater regional integration through integrated capital markets and payment
systems.
The AfDB said the continent must also take advantage of
emerging opportunities in critical minerals, climate finance, and institutional
investment despite rising geopolitical and financial risks globally.
“Seizing them will require credible policy frameworks,
strong institutions, and innovative instruments that crowd in private capital,”
the report added.
Sidi Ould Tah, president of the AfDB, said Africa’s
challenge goes beyond closing financing gaps to transforming its financial
systems to mobilise capital at scale.
“Ultimately, Africa’s challenge is not only to close
financing gaps, but also to transform financing systems to mobilize capital at
scale, deploying it efficiently, and strengthening financial agency,” Tah said.
“That’s the path to enhanced resilience and accelerated
inclusive growth.”
Tah added that the bank would continue to support the
continent through affordable development financing and initiatives such as the
new African financial architecture for development (NAFAD), aimed at mobilising
Africa’s financial resources at scale.
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