World Bank Sees Growth For Nigeria, But Inflation Threat Looms
World Bank Projects Growth Despite Global Pressures
NIGERIA’S economy is expected to remain resilient in 2026, with the World Bank projecting a 4.2 per cent growth rate despite mounting global uncertainties.
Speaking in Abuja, the Bank’s Lead Economist for Nigeria, Fiseha Haile, noted that business activity across the country has remained relatively stable, even as geopolitical tensions in the Middle East—particularly the Iran conflict—continue to disrupt global markets.
According to Haile, the impact of the crisis on Nigeria’s overall growth has been “contained,” with commercial activities maintaining a steady expansion trajectory.
Inflation and Fuel Costs Cloud Outlook
Despite the optimistic growth projection, the World Bank raised concerns over persistent inflation and rising fuel prices, which continue to strain household incomes.
Nigeria’s inflation rate, though significantly reduced from about 33 per cent in late 2024 to 15.06 per cent in February 2026, remains high compared to regional benchmarks.
Fuel prices, driven by global tensions, have surged by over 50 per cent, pushing up transportation, food, and production costs. This has deepened the cost-of-living crisis and slowed poverty reduction efforts.
The Bank urged Nigerian authorities to adopt prudent fiscal and monetary policies, including tightening monetary conditions, saving oil windfalls, and avoiding broad-based subsidies.
Reforms Gain Recognition
The World Bank acknowledged ongoing reforms under President Bola Ahmed Tinubu, including fuel subsidy removal, exchange rate unification, and tax restructuring.
These measures, it said, have helped stabilise Nigeria’s external position, with improved foreign exchange reserves and reduced currency volatility.
Additionally, Nigeria recorded a fiscal deficit of 3.1 per cent of GDP in 2025, while its debt-to-GDP ratio declined for the first time in a decade.
Experts Challenge Policy Prescriptions
However, the Bank’s recommendations—particularly on trade liberalisation and fuel imports—have drawn criticism from local economists.
Development economist Professor Ken Ife argued that free trade policies often disadvantage developing countries by encouraging import dependence at the expense of domestic production.
Similarly, analyst Okey Inuegbu dismissed the World Bank’s policy advice, urging the government to prioritise local manufacturing and agricultural production instead.
Call for Homegrown Economic Strategy
Both experts emphasised the need for Nigeria to strengthen domestic capacity. Ife advocated saving oil revenues in sovereign funds and building strategic reserves, while also restructuring the Nigerian National Petroleum Company Limited to focus on upstream operations.
Inuegbu highlighted insecurity as a major economic constraint, noting that restoring peace in agricultural regions could quickly boost food production and ease inflation.
Balancing Growth with Stability
While the World Bank’s projections offer cautious optimism, the divergence in views highlights a deeper debate over Nigeria’s economic direction.
At the core lies a delicate balance: sustaining growth while protecting livelihoods in an environment shaped by global shocks and domestic structural challenges.
