Nigeria has made meaningful progress in restoring macroeconomic stability, but inclusive growth must accelerate substantially to improve livelihoods, the World Bank has stated.
In its April 2026 Nigeria Development Update (NDU) titled ‘Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development,’ launched on Tuesday in Abuja, the World Bank said the progress partly depends on how effectively the country invests in its people, creates jobs, and starts in early life.
The NDU report notes that, while recent bold reforms have strengthened macroeconomic fundamentals, enhancing Nigerians’ productive capabilities will be critical to translating these gains into better living standards and jobs.
Nigeria’s economy grew by 4.0% in 2025, similar to 2024, driven mainly by services such as ICT, financial services, and real estate, with mild expansion in other sectors. Inflation has eased notably, falling to 15.1% year‑on‑year in February 2026, down from 26.3% a year earlier, supported by tight monetary policy, reduced exchange rate volatility, and improved food supply.
Despite these gains, household incomes have yet to recover fully and poverty remains high, highlighting the need to lower inflation further and complement stabilization with investments that expand economic opportunity and jobs.
“Nigeria’s external position remained positive in 2025, supported by stronger non‑oil exports, resilient remittances, and renewed portfolio inflows. The current account surplus reached 4.8% of GDP, while gross external reserves rose to $45.5 billion, equivalent to 8.7 months of imports. On the fiscal side, stronger non‑oil revenues lifted Federation Account receipts to 8.5% of GDP, although spending pressures widened the consolidated fiscal deficit modestly to 3.1% of GDP,” the report stated.
Middle East war
The Middle East conflict, the Washington-based lender stated, is expected to have mixed but manageable effects on Nigeria.
According to the report, higher oil prices will boost revenues and exports, but higher energy, fertilizer, and shipping costs, alongside second-round effects, will add to inflation.
In addition, it said, “global risk aversion could tighten financial conditions and pressure the exchange rate, which should remain flexible to cushion shocks.
“Fiscal policy should leverage the windfall to rebuild buffers and provide targeted support to vulnerable households, avoiding blanket subsidies. Monetary policy should remain tight, supported by lower import barriers on inputs and food. Clear, consistent policy communication will help anchor expectations. Deepening macro and structural reforms will increase resilience going forward.”
Commenting on the report, World Bank Country Director for Nigeria, Mathew Verghis, said: “Nigeria has made efforts to stabilise its economy, but welfare gains are still modest. Moreover, the conflict in the Middle East adds pressure. “Sustaining and deepening macroeconomic stabilization, as well as addressing structural constraints, will be critical to translating reform dividends into faster, more inclusive growth, jobs and improved living standards,”
“Investing early in nutrition, health, caregiving, safety and early learning is one of the most powerful ways Nigeria can convert today’s reform gains into higher productivity, better jobs, and lasting poverty reduction.”
Also speaking, Fiseha Haile, World Bank’s Lead Economist for Nigeria, states that “The outlook for Nigeria’s economy remains cautiously optimistic. Growth is projected at 4.2% over 2026-2028, supported by continued macroeconomic stabilization, ongoing structural reforms, and increased investment. Inflation, which is still high, is expected to fall gradually, albeit more slowly than previously expected due to pressures from the Middle East conflict”
Edu speaks
In his address, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the country will carefully manage the risks that come with rising global oil prices.
“We are on both sides of the equation. In this kind of environment, we must be prepared for different outcomes,” Edun said.
The minister warned that inflation remains a key concern, particularly as global developments continue to create uncertainty.