Washington, USA, 07 April 2026 -/African Media Agency (AMA)/- Nigeria has made meaningful progress in restoring macroeconomic stability, but inclusive growth must accelerate substantially to improve livelihoods—this partly depends on how effectively it invests in its people, create jobs, and starting in early life, according to the April 2026 Nigeria Development Update (NDU).
Titled Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development, the 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 Middle East conflict is expected to have mixed but manageable effects on Nigeria. Higher oil prices will boost revenues and exports, but higher energy, fertilizer, and shipping costs, alongside second-round effects, will add to inflation. 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.
However, macroeconomic stability alone is not sufficient. The NDU underscores that human capital development is a key channel through which macroeconomic gains can translate into improved living standards and jobs—and that channel begins early. Investments during pregnancy and early childhood shape long-term productivity and shared prosperity. Yet outcomes in Nigeria remain weak and unequal: about 110 out of every 1,000 children die before age five, 40% are stunted, and more than half are not developmentally on track before entering school.
“Nigeria has made efforts to stabilize its economy, but welfare gains are still modest. Moreover, the conflict in the Middle East adds pressures. 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,” said Mathew Verghis, World Bank Country Director for Nigeria. “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.”
Improving early childhood outcomes requires a more integrated approach—bringing together nutrition, health, responsive caregiving, early learning, and children’s living environments, including access to water and sanitation, into a coherent and continuous package of support. This includes defining a basic package of services from pregnancy to age five, improving targeting and delivery, engaging private sector and community providers, and aligning financing and coordination with measurable outcomes.
“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”, said Fiseha Haile, World Bank’s Lead Economist for Nigeria.
Distributed by African Media Agency (AMA) on behalf of Word Bank Group.
Contacts
In Abuja:
Mansir Nasir,
+234 803 354 6639
mnasir@worldbank.org
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