The World Bank has downgraded Nigeria’s 2026 growth projection, citing elevated global uncertainty, disruptions in oil markets and persistent domestic constraints weighing on economic performance.
In its April 2026 Economic Outlook update, released in early April 2026, the lender cut Nigeria’s growth forecast to 4.10 per cent for 2026 and 4.20 per cent for 2027, from a previous estimate of 4.40 per cent for both years.
The revision reflects heightened volatility in global energy markets, driven by renewed geopolitical tensions in the Middle East.
Earlier spikes in crude oil prices, linked to escalating friction between the United States and Iran, have fed through to higher fuel, transport and food costs in Nigeria, amplifying inflationary pressures.
Analysts at Meristem Securities Limited said the oil shock has weakened household purchasing power and intensified cost pressures for businesses, with potential drag on consumption and investment if sustained.
The World Bank also highlighted domestic constraints, including weak investment activity, policy uncertainty and uneven performance in agriculture and oil, as factors limiting stronger recovery.
Despite the downgrade, recent data suggest the economy remains in expansion.
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Figures from the Central Bank of Nigeria show the Purchasing Managers’ Index stayed above the 50-point threshold in early 2026, though it slowed to 53.20 points in March from 56.40 points in February, signalling softer momentum.
Markets have reacted unevenly, with government bond yields under pressure while treasury bills and Eurobonds held firmer as investors shifted toward safer assets.
Analysts say near-term growth will depend on higher output, particularly in oil, alongside exchange rate stability and a supportive interest rate environment to sustain credit and investment.
On the global front, data from the National Bureau of Statistics of China show inflation eased to 1.00 per cent year-on-year in March 2026 from 1.30 per cent in February, driven by softer food and core price pressures after seasonal demand.
However, rising energy costs linked to geopolitical tensions are beginning to push transport and industrial prices higher, with producer inflation returning to positive territory after an extended decline.
Economists warn that sustained oil price strength could reignite global inflationary pressures, with spillover risks for import-dependent economies such as Nigeria.
While the outlook has been revised lower, analysts maintain that policy reforms, relative exchange rate stability and gradual macroeconomic gains could support moderate growth over the medium term.