The World Bank has warned that high fuel prices could slow Nigeria’s poverty reduction efforts despite expected economic growth and falling inflation in 2026.
According to the World Bank’s latest Africa Economic Update, Nigeria’s economy is projected to grow from 4.0 per cent in 2025 to 4.3 per cent in 2026, averaging 4.4 per cent in 2027 and 2028.
Despite the stronger economic outlook, the report noted that higher energy prices linked to conflicts in the Middle East could place additional pressure on low-income households, which spend a larger share of their income on transportation and essential goods.
The World Bank also expects headline inflation to moderate from 23.0 per cent in 2025 to 15.7 per cent in 2026. However, food inflation is expected to remain elevated, reaching 20.3 per cent around mid-year.
According to the report, Nigeria’s poverty rate is projected to stand at 63 per cent in 2026 before gradually declining to about 58 per cent by 2028.
The projected rise in international oil prices could, however, strengthen Nigeria’s external position, with the current account surplus expected to increase from 4.8 per cent of GDP in 2025 to 6.0 per cent in 2026.
The World Bank also identified increased government spending ahead of the 2027 general elections as a potential risk to the continuation of fiscal reforms.
It noted that Nigeria largely relies on market forces to determine energy prices, unlike some regional countries that have introduced direct measures to shield consumers from external energy price shocks.
By Musekir Faisat Omolara
