Nigeria’s economy is expected to grow at its fastest pace in more than a decade, after the World Bank upgraded its growth forecast for Africa’s largest economy.
In its 2026 Global Economic Prospects report released on Tuesday, the World Bank said Nigeria’s economic growth is forecast to strengthen to 4.4 per cent in both 2026 and 2027, up from an estimated 4.2 per cent in 2025.
|
|
The bank said the improvement would be driven largely by a continued expansion in the services sector, particularly finance and information and communication technology, alongside a rebound in agricultural output and modest growth in non-oil industries.
It added that economic reforms, including changes to the tax system and the continuation of prudent monetary policy, are expected to support growth, improve investor confidence and help further reduce inflation.
|
|
|
|---|
Higher oil output is also expected to help offset weaker global oil prices, boosting fiscal revenues and strengthening Nigeria’s external balance, according to the report.
“This further firming of growth is anticipated to be underpinned by a continued expansion in services and a rebound in agricultural output, with a modest acceleration in non-oil industry. Economic reforms, including in the tax
system, along with continued prudent monetary policy, are expected to continue supporting activity.
“They are also expected to improve investor sentiment and reduce inflation further. Higher oil output is expected to offset lower
international oil prices this year, helping to boost fiscal revenues and strengthen the external balance,” it said.
Stay Ahead with Premium Times
Follow us on Google News and never miss breaking stories, investigations, and in-depth reporting.
Add as a preferred source on Google
Stronger performers
The World Bank noted that Nigeria was one of the major Sub-Saharan African economies where growth firmed in 2025, contrasting with a slowdown in Ethiopia and a more modest recovery in South Africa.
It said Nigeria’s improved performance last year was supported by stronger services activity, a gradual recovery in agriculture and the country’s emergence as a net exporter of refined petroleum products, following increased domestic refining capacity.
Despite the positive outlook, the bank warned that Nigeria’s past experience with fiscal reforms highlights the importance of strong institutions.
Nigeria introduced fiscal rules to reduce its dependence on oil revenues and improve macroeconomic stability.
However, the World Bank said weak institutional frameworks have limited the effectiveness of these rules, resulting in mixed outcomes despite early progress.
Sub-Saharan Africa
Beyond Nigeria, the World Bank said economic growth in Sub-Saharan Africa picked up to an estimated 4.0 percent in 2025, supported by easing inflation and higher-than-expected commodity prices, particularly gold and other precious metals.
Growth across the region is forecast to firm further to 4.3 per cent in 2026 and 4.5 per cent in 2027, driven by stronger investment and exports.
“Growth in SSA is forecast to firm to 4.3 percent in 2026 and 4.5 percent in 2027, supported by strengthening investment and exports,” it said.
However, the bank cautioned that the improved outlook depends on a stable external environment and meaningful improvements in security in several fragile and conflict-affected countries.
It also warned that growth across many African economies remains below long-term averages and is insufficient to create enough jobs, raise real incomes significantly or meaningfully reduce extreme poverty.
Debt, trade risks remain
The report noted that while public debt-to-GDP ratios across the region are expected to decline slightly, debt-servicing costs remain elevated, limiting fiscal space for development spending.
READ ALSO: NPTF begins construction of police quarters in Enugu
The World Bank also flagged potential risks from global trade developments, including the possible expiration of the United States’ African Growth and Opportunity Act (AGOA) in late 2025, which could hurt export-dependent economies.
Still, it said ongoing efforts to deepen regional trade through the African Continental Free Trade Area (AfCFTA) could help cushion some of these external shocks.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
More News
