World Bank upgrades Nigeria outlook, says reforms improving economy

The World Bank has upgraded Nigeria’s economic outlook, citing improving macroeconomic management and reforms as growth strengthens across much of sub-Saharan Africa.

The Bank said Nigeria was among nearly three-quarters of African economies whose growth forecasts had been revised upward in its latest Africa Economic Update.

It listed Nigeria alongside Angola, Ethiopia and Zambia among countries showing stronger economic performance.

“These gains reflect years of reforms and improved economic management,” Andrew Dabalen, World Bank Chief Economist for Africa, said.

The Bank, however, warned that stronger headline growth must translate into jobs and improved living standards.

“The next challenge is turning growth into more jobs and better opportunities,” Dabalen said.

Sub-Saharan Africa’s economy is now projected to expand by 4.3 per cent in 2026, up from 4.1 per cent in 2025.

The World Bank attributed the improvement to stronger domestic demand, greater macroeconomic resilience and investments associated with energy transition and digital technologies.

It warned, however, that geopolitical tensions, tighter financial conditions, natural disasters, disease outbreaks and insecurity continued to threaten the recovery.

The Bank said growth remained insufficient to dramatically reduce extreme poverty or create enough jobs for Africa’s rapidly expanding labour force.

Nigeria is also emerging as one of Africa’s centres of artificial-intelligence activity, according to the report.

The Bank said AI adoption remained at an early stage across most of the continent but was concentrated particularly in Nigeria, Kenya and South Africa.

It urged governments to invest in reliable electricity, affordable internet access, digital skills, computing infrastructure and effective regulation.

According to the Bank, affordable and locally adapted AI applications could help transform agriculture, healthcare, education, finance, logistics and public administration.

Nigeria’s macroeconomic performance improved further in 2026, with real GDP expanding by 4.2 per cent in the first half of the year, according to the Bank’s country assessment.

The institution said stronger agriculture and services had supported growth, while foreign reserves and the external position had also improved.

It, however, warned that growth remained too weak to generate sufficient productive employment and significantly reduce poverty.

The Bank currently projects Nigeria’s economy to grow by an average of about 4.4 per cent between 2026 and 2028.

It said Nigeria must now translate macroeconomic stabilisation into improved household welfare through stronger private investment, productivity, infrastructure, human capital and social protection.

The Washington-based institution stressed that Africa’s policy challenge was no longer simply achieving higher growth figures but ensuring that economic expansion created better jobs and opportunities for its young population.