The World Bank says Nigeria’s economic growth remains on track in the first half of 2026 despite the ongoing Iran war and rising global energy prices.
This was disclosed by the World Bank’s Lead Economist for Nigeria, Fiseha Haile, during a presentation in Abuja on Tuesday.
While business activity has remained stable, the Bank warned that rising fuel costs and persistent inflation could erode incomes and slow poverty reduction.
The development comes amid ongoing economic reforms by the Federal Government aimed at stabilising the economy, even as global geopolitical tensions continue to exert pressure on prices.
What the World Bank is saying
The World Bank noted that Nigeria’s economy has shown resilience, with business activity continuing to expand despite external shocks.
- “Overall business activity has been expanding over the past few months, suggesting the impact on growth has been relatively contained. But the shock is still being felt through higher inflation,” said Fiseha Haile.
- “Inflation is still elevated and under increasing pressure, and that poses risks to incomes and poverty reduction.”
Haile emphasised that although growth remains intact, inflationary pressures—particularly from rising fuel costs—could undermine recent economic gains.
More Insights
The World Bank highlighted key macroeconomic trends shaping Nigeria’s economic outlook, including inflation dynamics, fiscal performance, and external buffers.
- Inflation declined to 15.06 per cent in February 2026 from around 33 per cent in December 2024, though it remains high compared to regional peers.
- Fuel prices have risen by more than 50 per cent amid the Middle East conflict, increasing transportation, food, and production costs.
- Nigeria’s external reserves have improved, with reduced exchange rate volatility, although tighter global financing conditions remain a risk.
- The fiscal deficit widened slightly to 3.1 per cent of GDP in 2025, while the debt-to-GDP ratio declined for the first time in a decade.
The World Bank projects economic growth of about 4.2 per cent in 2026 and advised authorities to maintain a tight monetary policy, save windfalls from higher oil prices, and avoid broad subsidies.
- The World Bank highlighted a crisis in early childhood development, with about 110 deaths per 1,000 children under five and roughly 40 per cent stunting.
- More than half of Nigerian children fail to meet developmental milestones before school age, highlighting gaps in health, nutrition, and education systems.
What you should know
In January, the World Bank retained Nigeria’s economic growth forecast at 4.4% for 2027.
The Bretton Woods Institution also upgraded Nigeria’s 2026 growth estimate to 4.4%, up from the 3.7% forecast contained in its June 2025 Global Economic Prospects report.
- The World Bank also projected that growth in Sub-Saharan Africa will strengthen to 4.3% in 2026, supported by economic reforms, resilient domestic investment, and easing inflation across the region.
