Nigeria’s economy will grow by 4.3 per cent in 2026, but high fuel prices will slow the pace of poverty reduction, the World Bank has warned.
The Bank gave the forecast in its October 2026 Africa Pulse report where it projected growth of 4.4 per cent for both 2027 and 2028, up from 4.0 per cent in 2025, driven by improved economic stability and a recovery in private investment.
According to the report, services particularly finance, information and communications technology, and real estate, will remain the main drivers of growth, while agriculture is expected to recover and industrial growth slows as oil production and manufacturing lose momentum.
The World Bank projected inflation to fall to 15.7 per cent in 2026 from 23.0 per cent in 2025, and further to 12.2 per cent by 2028.
It attributed the expected easing to tight monetary policy, a more stable exchange rate and improving supply conditions.
The Bank said lower inflation would support household purchasing power but noted that slower price increases do not reverse earlier rises in living costs.
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The lender said elevated fuel prices linked to the Iran-Israel conflict in the Middle East have pushed fuel prices up by more than 50 per cent, raising transport, food and production costs. The Bank warned the burden falls more heavily on low-income households.
“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 report stated.
While higher oil prices could boost Nigeria’s public finances and external accounts, the Bank said volatile capital flows and global uncertainty could offset those gains.
It also warned that business confidence and reform momentum could be affected by commodity price volatility, tighter global financial conditions, security challenges and policy uncertainty ahead of the 2027 elections.
The World Bank noted that across Sub-Saharan Africa, stronger growth has not translated into substantial poverty reduction because growth in income per person remains slow.
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