World Bank downgrades Nigeria’s 2026, 2027 economic growth
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The World Bank has downgraded Nigeria’s economic growth projection to average of 4.1 percent in 2026.
The projection for 2027 was also downgraded to 4.2 percent.
This is down from the 4.4 percent growth projection by the Bretton Wood institution in October 2025.
In its April 2026 Africa Economic Update titled ‘Making Industrial Policy Work in Africa,’ released on Wednesday, April 8, 2026, 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.”
The World Bank noted that economic activity in sub-Saharan Africa is projected to grow by 4.1 percent in 2026, unchanged from 2025.
It warned that Geopolitical risks—including the 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.
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.
” In the short term, governments should target scarce resources to protect the most vulnerable households. At the same time, maintaining macroeconomic stability—by controlling inflation and exercising prudent fiscal management—will be essential to navigate the current shock and position African countries for a faster recovery once the crisis subsides,” said Andrew Dabalen, World Bank Group Chief Economist for the Africa Region.
