The World Bank has revised Nigeria’s economic growth projection downward to 4.1 per cent for 2026, citing weak investment and persistent structural constraints.
The adjustment marks a decline from the lender’s earlier forecast of 4.4 per cent for both 2026 and 2027. In its latest outlook, growth for 2027 was also revised slightly to 4.2 per cent, while 2028 is projected at 4.3 per cent.
The revised projections were contained in the bank’s April 2026 Africa Economic Update titled Making Industrial Policy Work in Africa, released on Wednesday. The report noted that while macroeconomic conditions are stabilising and investment is gradually recovering, underlying structural issues continue to weigh on growth.
According to the report, the services sector—particularly ICT, finance, and real estate—will remain the primary driver of economic expansion, while agriculture and industry are expected to grow at a slower pace due to existing constraints.
The bank also projected a steady decline in inflation, forecasting a drop from 23 per cent in 2025 to 14.9 per cent in 2026, and further easing to 10.7 per cent by 2028, driven by the lagged effects of monetary tightening and improved 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,” the 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 volatility, tighter global financial conditions, security concerns, and policy uncertainty ahead of the 2027 elections.”
On the regional outlook, the bank said economic growth in sub-Saharan Africa is expected to remain at 4.1 per cent in 2026, unchanged from 2025, though this represents a 0.3 percentage point downgrade from its October 2025 forecast.
“Across countries in the region, some large countries have been revised downward in 2026; notably, Angola, Kenya, Mozambique, Nigeria, Senegal, South Africa, and Zambia,” the report stated.
“Overall, about 60 per cent of the countries in the region (29 of 47) recorded downward revisions to their 2026 growth forecasts.”
Despite the downgrade, the bank noted that improved macroeconomic stability—including better inflation control, stronger domestic currencies, and easing fuel and food prices—has continued to support private consumption and investment.
“These developments have helped bolster private consumption and investment, while enhanced policy frameworks are strengthening credibility and resilience,” it added.
However, it warned that external risks—particularly escalating tensions in the Middle East—could undermine gains by driving up energy prices, disrupting trade flows, and reigniting inflationary pressures.
From an expenditure perspective, the report indicated that growth in 2026 would be largely driven by private consumption and investment. Household consumption is expected to contribute 1.6 percentage points to GDP growth, down from 1.8 per cent in 2025, while investment is projected to contribute 1.0 per cent, slightly up from 0.9 per cent.
On the production side, the services sector is forecast to account for about half of total growth, led by finance, ICT, wholesale and retail trade, and tourism.
