The World Bank has adjusted its forecast for Nigeria's economic expansion, now anticipating an average growth rate of 4.1 percent for 2026. This represents a decrease from the previously projected 4.4 percent.
Earlier projections made by the global financial institution in October 2025 had indicated a 4.4 percent growth for Nigeria in both 2026 and 2027. However, the outlook for 2027 has also been revised, now standing at 4.2 percent, with the forecast for 2028 set at 4.3 percent.
According to the bank's April 2026 Africa Economic Update, titled 'Making Industrial Policy Work in Africa', this revised forecast is attributed to more stable macroeconomic conditions and a gradual recovery in investment activities.
The report highlights that Nigeria's growth will continue to be primarily propelled by the services sector, with significant contributions expected from information and communication technology (ICT), finance, and real estate. Conversely, the agriculture and industrial sectors are anticipated to experience slower expansion due to inherent structural limitations.
Furthermore, the World Bank projects a decline in inflation, moving from an estimated 23 percent in 2025 to 14.9 percent in 2026, with a further reduction to 10.7 percent expected by 2028. This downward trend is linked to the lagged impact of monetary policy tightening and improvements in supply chain dynamics.
"While poverty levels remain high, a gradual decrease is anticipated as inflation subsides, although this will be somewhat tempered by elevated fuel prices, partly influenced by the conflict in the Middle East," the bank stated.
"Increased oil prices could benefit fiscal and external balances, though this may be counteracted by fluctuations in capital flows amidst global uncertainty. Additionally, business confidence and reform momentum could be affected by commodity price volatility, tighter global financial conditions, security issues, and policy unpredictability leading up to the 2027 elections."
In a broader regional context, the World Bank forecasts that economic activity across sub-Saharan Africa will grow by 4.1 percent in 2026, maintaining the pace set in 2025. However, this regional outlook has been revised downwards by 0.3 percentage points compared to the October 2025 projections.
"Several major economies within the region have seen their 2026 growth forecasts revised downwards, including Angola, Kenya, Mozambique, Nigeria, Senegal, South Africa, and Zambia," the report noted. "In total, approximately 60 percent of the countries in the region (29 out of 47) experienced downward adjustments to their 2026 growth projections."
Despite these downward revisions, the bank indicated that regional economic activity continues to receive a boost from improved macroeconomic stability, which includes better inflation management, strengthening domestic currencies, and easing prices for fuel and food.
"These positive developments have supported household consumption and investment, while enhanced policy frameworks are building greater credibility and resilience," the bank elaborated.
Higher prices for commodities, particularly precious metals and agricultural products, have also bolstered export revenues and government income. Trade activity has remained robust, notwithstanding ongoing global geopolitical tensions.
However, the World Bank cautioned that these gains could be jeopardized by escalating external risks, most notably the heightened conflict in the Middle East. Such a scenario could lead to increased energy prices, disrupt trade routes, and reintroduce inflationary pressures.
From an expenditure perspective, the report anticipates that growth in 2026 will be largely fueled by private consumption and investment. Household consumption is projected to contribute 1.6 percentage points to GDP growth, a slight decrease from 1.8 percent in 2025, while investment is expected to contribute 1.0 percent, an increase from 0.9 percent.
On the production side, the services sector is expected to be the main contributor to overall growth, accounting for roughly half of the total expansion. Key sub-sectors driving this include finance, ICT, wholesale and retail trade, and tourism.
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