The World Bank has upgraded its forecast for Nigeria’s economic growth in 2026 to 4.3%, from 4.0% recorded in 2025. The bank cited improving macroeconomic stability, stronger investor confidence and a gradual recovery in private investment.
The lender also projected that Nigeria’s economy would expand by 4.4% annually in 2027 and 2028.
This places the country among a group of sub-Saharan African economies where reforms and improved economic management are beginning to translate into stronger growth expectations.
The projection was contained in the World Bank’s October 2026 Africa Economic Update released on Tuesday.
“Economic activity in Nigeria is projected to strengthen from 4.0 percent in 2025 to 4.3 percent in 2026, before edging up to 4.4 percent annually in 2027–28, supported by improving macroeconomic stability, strengthening investor confidence, and a gradual recovery in private investment,” the bank said.
The upgrade comes after Nigeria recorded stronger-than-expected economic expansion in the second quarter of 2026.
Real Gross Domestic Product (GDP) grew by 4.43% year-on-year, compared with 4.23% in Q2 2025 and 3.89% in Q1 2026 .
Reform Gains And Job Concerns
Analysts said the revised forecast represents a positive assessment of Nigeria’s reform programme.
However, they cautioned that the quality and inclusiveness of growth would ultimately determine whether the improvement translates into stronger household incomes and lower poverty.
An analysis of the Q2 GDP data by Credit Direct showed that services remained the backbone of the economy. Services contributed 2.60 percentage points to growth. Agriculture contributed 1.15 percentage points, while industry contributed 0.69 percentage points.
The World Bank acknowledged this challenge. It warned that faster economic growth has yet to translate sufficiently into poverty reduction and productive job creation across sub-Saharan Africa.
The lender projected that 47.8% of the region’s population will remain poor in 2026, measured at the international poverty line of $3 per person per day .
Andrew Dabalen, World Bank Chief Economist for Africa, said the region’s next challenge was to turn economic growth into “more jobs and better opportunities.”
He said growth forecasts had been upgraded for nearly three-quarters of countries in the region, including Nigeria, Zambia, Ethiopia and Angola.
Growth Momentum And Risks
The World Bank’s improved outlook is also supported by broader evidence of strengthening economic activity.
Nigeria’s Q2 GDP growth of 4.43% was the strongest quarterly expansion in several years. Agriculture and services recorded stronger performances, although industrial growth remained a concern.
Analysts said the performance suggests that the economy is gradually responding to improved foreign-exchange conditions, increased oil production, monetary policy adjustments and broader macroeconomic reforms.
However, they noted that maintaining growth above four percent would require continued improvement in the business environment, infrastructure, access to credit and investor confidence.
The World Bank’s forecast also comes at a time when Nigeria is benefiting from improved international sentiment. S&P Global Ratings recently upgraded Nigeria’s long-term foreign and local currency ratings to ‘B’ from ‘B-’.
The upgrade shows improved confidence in the country’s economic and fiscal trajectory.
Despite the positive outlook, the World Bank warned that growth alone would not be enough to deliver broad-based prosperity.
The lender said per-capita income growth across sub-Saharan Africa remains significantly below overall GDP growth. Higher fuel, food and other energy-related costs continue to disproportionately affect low-income households.
Economic Analysts Weigh In
For Nigeria, analysts said this remains a critical test of the recovery.
They argued that stronger GDP growth must increasingly be accompanied by rising real incomes, improved consumer purchasing power and greater employment opportunities. Only then would the recovery be felt beyond macroeconomic indicators.
The World Bank raised its overall growth forecast for sub-Saharan Africa to 4.3% in 2026, from 4.1% previously. This is despite geopolitical tensions, higher energy prices, tighter global financial conditions and other external risks.
For Nigeria, the 4.3% projection therefore represents more than an upward revision. It is a vote of confidence in the direction of economic reforms.
At the same time, it raises expectations that the government must convert improved macroeconomic stability into higher investment, stronger productivity, more jobs and better living standards.
