The World Bank lowered its projections for Nigeria’s economic growth in 2026 and 2027

The World Bank has lowered its projection for Nigeria’s economic growth to an average of 4.1 percent in 2026.

The projection for 2027 was also lowered to 4.2 percent.

This figure is down compared to the projected growth of the Bretton Wood institutions in October 2025 of 4.4 percent.

In its April 2026 Africa Economic Update titled ‘Making Industrial Policy Work in Africa’, released on Wednesday, 8 April 2026, the global lender said the growth outlook is driven by more stable macroeconomic conditions and a gradual recovery in investment.

The World Bank said the services sector, especially ICT, finance and real estate, will remain the main engines of growth, while agriculture and industry are expected to grow more slowly due to structural constraints.

The agency also said inflation is expected to decline from 23 percent in 2025 to 14.9 percent in 2026, and further decline to 10.7 percent in 2028, reflecting the slow impact of policy tightening and improving supply conditions.

“While poverty remains high, poverty rates are expected to decline gradually as inflation falls, albeit more slowly due to rising fuel prices related to the Middle East conflict,” the World Bank said.

“Rising oil prices may support fiscal and external balance, partially offset by volatility in capital flows amid global uncertainty.

“However, business sentiment and reform momentum may be hampered by commodity prices, commodity price volatility, tighter global financial conditions, security concerns, and policy uncertainty ahead of the 2027 elections.”

The World Bank notes that economic activity in sub-Saharan Africa is projected to grow by 4.1 percent in 2026, unchanged from 2025.

The report warns that geopolitical risks—including conflict in the Middle East, high debt service burdens, and long-standing structural constraints, continue to weigh on the region’s capacity to accelerate growth and create jobs.

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The global lender said its 2026 growth forecast for the region had been lowered by 0.3 percentage points compared with its October 2025 projection.

“Across countries in the region, several major countries in the region have been revised down by 2026; most notably Angola, Kenya, Mozambique, Nigeria, Senegal, South Africa and Zambia,” the report said.

“Overall, around 60 percent of countries in the region (29 of 47) recorded lower revisions to their growth forecasts for 2026.”

Despite the downgrade, the World Bank said economic activity across the region was supported by better macroeconomic stabilization, including better control of inflation, a stronger domestic currency, and lower fuel and food prices.

“These developments have helped increase private consumption and investment, while an improved policy framework strengthens credibility and resilience,” the report said.

The World Bank added that higher commodity prices, especially precious metals and beverages, have supported export earnings and government revenues, while trade performance remains resilient despite ongoing global tensions.

But the World Bank warned that progress was being tested by rising external risks, especially escalating conflict in the Middle East, which could trigger higher energy prices, disrupt trade and renew inflationary pressures.

On the spending side, the report said growth in 2026 is expected to be largely driven by private consumption and investment.

The Bretton Woods Institutions said household consumption is projected to contribute 1.6 percentage points to GDP growth, down from 1.8 percent in 2025, while investment is forecast to contribute 1.0 percent, up from 0.9 percent.

On the production side, the World Bank said the services sector is estimated to contribute around half of total growth, with the financial sector, ICT, wholesale and retail trade, and tourism as the main sectors in economic activity.

“In the short term, governments must target scarce resources to protect the most vulnerable households. At the same time, maintaining macroeconomic stability—by controlling inflation and implementing prudent fiscal management—will be critical to weathering the current shock and positioning African countries for a faster recovery once the crisis subsides,” said Andrew Dabalen, World Bank Group Chief Africa Economist.

By: Babajide Okeowo