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The World Bank raised its 2026 economic growth forecast for Nigeria to 4.3 per cent on Tuesday, up from 4.0 per cent in 2025.
In its latest Africa Economic Update, titled Building AI Readiness, the lender attributed the upgraded outlook to recovering investor confidence, improving macroeconomic stability, and a gradual revival in private investment following recent market reforms.
Despite the positive momentum, the Washington-based institution warned that political pressures could jeopardise economic progress.
“Rising pre-election spending ahead of the 2027 elections” threatens to weaken reform momentum and “erode the social consensus needed to sustain ongoing macroeconomic adjustment efforts,” the bank noted.
Analysts stress that politically sensitive measures, such as subsidy removals and currency adjustments, become increasingly difficult to maintain when households continue to confront high living costs.
The report projected a sharp drop in annual inflation, forecasting rates to fall from 23.0 per cent in 2025 to 15.7 per cent in 2026.
Responding to concerns over political spending, Central Bank of Nigeria Governor Olayemi Cardoso affirmed that the apex bank stands ready to absorb excess liquidity.
“We are ready,” Cardoso stated, adding that the bank will “proactively deploy any tools and instruments to mop up any excess liquidity” as the nation approaches the next election cycle.
