Nigeria's growth accelerates to 4.2% as World Bank urges better state spending

Nigeria's economy grew 4.2 percent in the first half of 2026, strengthening from 3.9 percent in the comparable period of 2025 and 3.5 percent in 2024, the World Bank said in its latest Nigeria Development Update.

Services and agriculture led the expansion. The Bank also said the poverty rate stabilised for the first time since 2019, an early sign that the long squeeze on household welfare may be easing, although living conditions remain difficult for many Nigerians.

External accounts remain in surplus

The current-account surplus widened to $12 billion, or 7.1 percent of gross domestic product, in the first half. That compared with $8.6 billion, or 6.7 percent of GDP, a year earlier. A surplus can support foreign-exchange liquidity and external buffers, but it does not by itself guarantee stronger household purchasing power.

The World Bank projects average growth of 4.4 percent between 2026 and 2028 and expects inflation to move toward 12 percent by 2028. Those forecasts remain exposed to oil-market volatility, insecurity, weak infrastructure and the pace of domestic reform.

The spending test moves to the states

Higher federation revenues have increased the resources reaching state governments. The report argues that the next test is the quality, efficiency and transparency of spending, particularly on basic services and infrastructure that can crowd in private investment.

That distinction matters: larger allocations improve fiscal capacity, but development outcomes depend on what states buy, how projects are selected and whether citizens can track delivery.

Source

World Bank, Nigeria Development Update, “Higher Revenues, Better Lives: Strengthening State Spending for Growth, Jobs and Services” (8 Oct 2026).