The World Bank forecasts Nigeria’s economy to grow around 4.1-4.2% in 2026, driven by continued macroeconomic stabilization, structural reforms, and increased investment. However, the ongoing Iran war is pushing up fuel prices and inflation, threatening household incomes and poverty reduction efforts.

Key Highlights:

– Economic Growth: 4.1-4.2% growth forecast for 2026

– Inflation: Rising fuel costs and Iran war fallout may increase inflation

– Policy Recommendations; Tight monetary policy, saving windfall oil revenues, and avoiding blanket subsidies

The World Bank emphasizes the need for Nigeria to accelerate reforms, prioritize early childhood development, and address human capital challenges to achieve inclusive long-term growth. Inflation eased sharply to 15.06% in February from around 33% in December 2024, but remains high compared with regional peers.