The World Bank’s latest Nigeria Development Update finds that economic performance improved in 2026, with stronger growth, public finances and external balances despite inflationary pressure from higher oil prices. Real gross domestic product grew 4.2% in the first half, driven mainly by services and a stronger agricultural contribution, stabilizing the poverty rate for the first time since 2019. The current account surplus rose to USD 12 billion, or 7.1% of GDP, while external reserves exceeded USD 54 billion in September. However, fuel and food price pressures interrupted the disinflation trend and continued to constrain household purchasing power. The report’s special analysis finds that gross federation revenues increased 69% in real terms between 2023 and 2025, largely because of exchange rate reforms, the removal of the petrol subsidy and stronger revenue administration. States used the additional funds primarily to expand economic infrastructure and strengthen their fiscal positions. Their aggregate revenues and expenditures rose by about 93% and 92%, respectively, while capital spending increased from 46% to 61% of total expenditure. Transport recorded the largest spending increase, while health, education and social protection spending grew more slowly than economic infrastructure. The World Bank projects average economic growth of 4.4% from 2026 through 2028, with inflation declining gradually to about 12% by 2028 and poverty beginning to fall. It called for sustained macroeconomic reforms, more efficient and accountable state spending, stronger internally generated revenue and greater investment in human capital and public services to support private sector growth and job creation.
World Bank finds Nigerian growth reached 4.2% as higher revenues shifted state spending toward infrastructure
The World Bank reported that Nigeria’s real GDP grew 4.2% in the first half of 2026, while stronger oil earnings and reforms improved public finances and the external position. State revenues rose sharply between 2023 and 2025, with most additional spending directed toward infrastructure rather than health and education. The bank projects average growth of 4.4% through 2028 and inflation of about 12% by 2028.