NIGERIA’s higher crude oil production is expected to cushion the impact of weaker global oil prices in the near term, helping to support government revenues and strengthen the country’s external position, according to the World Bank. The bank said this buffer should help protect the economy from external shocks as authorities maintain a cautious macroeconomic policy stance.

In its latest ‘Global Economic Prospects’ report, the World Bank noted that monetary policy across many developing economies was likely to remain measured, as central banks continued to balance inflation control with the need to sustain growth. Although inflationary pressures have eased in some countries, the World Bank said they remained elevated enough to warrant prudence, particularly in economies that had only recently achieved stability.

For Nigeria, the World Bank projected that economic growth would accelerate to 4.4 percent in both 2026 and 2027, the fastest pace in more than a decade. The stronger outlook is expected to be driven by continued expansion in the services sector, a rebound in agricultural output, and a modest pickup in non-oil industrial activity. Ongoing economic reforms, including improvements to the tax system, alongside prudent monetary policy, are also expected to support activity, boost investor confidence, and further reduce inflation.

The report said Nigeria’s economy grew by 4.2 percent in 2025, reflecting robust performance in services, particularly finance and information and communication technology, alongside a gradual recovery in agriculture. Growth was further supported by Nigeria’s emergence as a net exporter of refined petroleum products following increased domestic refining capacity.

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Beyond Nigeria, the World Bank forecast that growth in Sub-Saharan Africa would firm to 4.3 percent in 2026 and 4.5 percent in 2027, supported by stronger investment and exports. However, it cautioned that this improvement depended on a stable external environment and on expected gains in security conditions materialising in several fragile and conflict-affected countries. Compared with its June 2025 projections, growth forecasts for both years were revised upward by 0.2 percentage point.

Despite the brighter outlook, the bank warned that projected growth rates for many Sub-Saharan African economies in 2026 and 2027 would remain about half a percentage point below their average growth between 2000 and 2019. It said such growth would be insufficient to generate enough jobs to keep pace with rapid labour force expansion or to meaningfully raise real per capita incomes and reduce extreme poverty.

The report also noted that Sub-Saharan Africa’s relatively limited exposure to US markets should help contain the impact of higher US import tariffs. Baseline assumptions suggest current bilateral tariff levels will remain unchanged during the forecast period. However, the global lender cautioned that further tariff increases, including the possible expiration of the African Growth and Opportunity Act in late 2025 if not extended, could significantly affect some economies, particularly those reliant on textile and vehicle exports. Progress in implementing the African Continental Free Trade Area (AfCFTA) is expected to deepen regional trade integration and help offset some of these risks.

On the fiscal front, the World Bank said primary fiscal deficits across Sub-Saharan Africa were expected to narrow over the forecast horizon, reflecting improved budget discipline, including in non-resource-rich economies. Rising interest costs, however, are projected to offset part of these gains. While public debt-to-GDP ratios are forecast to decline slightly, they are expected to remain elevated, requiring continued fiscal consolidation that could weigh on demand.

The lender added that government interest payments in Sub-Saharan Africa in 2026 were expected to remain well above the 2010–2019 average, reflecting a shift toward less concessional borrowing and the lingering effects of heavy debt accumulation after the COVID-19 pandemic.

Increased reliance on riskier financing sources could heighten exposure to currency, interest rate, and refinancing risks. Nonetheless, financing conditions are improving, with several countries, including Angola, the Republic of Congo, Kenya, and Nigeria, regaining access to international capital markets.