…Tasks Govt On Inclusive Growth
The World Bank Group has commended the Nigerian government on the meaningful progress it made in restoring macroeconomic stability in the country over the past few years, but charged the government to substantially accelerate inclusive growth to improve livelihoods.
The Breton Woods institution, which gave the charge in its April 2026 Nigeria Development Update (NDU) released on Tuesday in Abuja, maintained that achieving inclusive growth in the country would partly depend on how effectively the government invests in its people, create jobs, and starting in early life.
Titled ‘Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development’, the report noted that while recent bold reforms had strengthened macroeconomic fundamentals but that enhancing Nigerians’ productive capabilities would be critical to translating these gains into better living standards and jobs.
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The World Bank Group recalled that Nigeria’s economy grew by 4.0% in 2025, similar to 2024, driven mainly by services such as ICT, financial services, and real estate, with mild expansion in other sectors. Inflation has eased notably, falling to 15.1% year‑on‑year in February 2026, down from 26.3% a year earlier, supported by tight monetary policy, reduced exchange rate volatility, and improved food supply.
It observed that despite these gains, household incomes had yet to recover fully and poverty remained high, highlighting the need to lower inflation further and complement stabilization with investments that expand economic opportunity and jobs.
Similarly, the bank reported that Nigeria’s external position remained positive in 2025, supported by stronger non‑oil exports, resilient remittances, and renewed portfolio inflows with the current account surplus reaching 4.8% of GDP, while gross external reserves rose to $45.5 billion, equivalent to 8.7 months of imports.
According to the report, on the fiscal side, stronger non‑oil revenues lifted Federation Account receipts to 8.5% of GDP, although spending pressures widened the consolidated fiscal deficit modestly to 3.1% of GDP.
On the current US-Israeli war against Iran, the World Bank Group projected that the Middle East conflict was expected to have mixed but manageable effects on Nigeria, noting that while higher oil prices will boost revenues and exports, but higher energy, fertilizer, and shipping costs, alongside second-round effects, will add to inflation.
It cautioned that global risk aversion could tighten financial conditions and pressure the exchange rate, which should remain flexible to cushion shocks.
To respond to the shocks, the development finance institution advised the Federal Government to ensure that fiscal policy leverages the windfall to rebuild buffers and provide targeted support to vulnerable households, avoiding blanket subsidies.
This is even as it urged the government to tighten the monetary policy, supported by lower import barriers on inputs and food, adding that clear, consistent policy communication will help anchor expectations and that deepening macro and structural reforms will increase resilience going forward.
The World Bank Group pointed out, however, macroeconomic stability alone would be not sufficient and underscored that human capital development is a key channel through which macroeconomic gains can translate into improved living standards and jobs—and that channel begins early.
The NDU report further reflected that investments during pregnancy and early childhood shape long-term productivity and shared prosperity, clarifying that yet outcomes in Nigeria remain weak and unequal as about 110 out of every 1,000 children die before age five, 40% are stunted, and more than half are not developmentally on track before entering school.
Commenting on the latest NDU report findings, World Bank Country Director for Nigeria, Mathew Verghis, said: “Nigeria has made efforts to stabilize its economy, but welfare gains are still modest. Moreover, the conflict in the Middle East adds pressures. Sustaining and deepening macroeconomic stabilization, as well as addressing structural constraints, will be critical to translating reform dividends into faster, more inclusive growth, jobs and improved living standards.
“Investing early in nutrition, health, caregiving, safety and early learning is one of the most powerful ways Nigeria can convert today’s reform gains into higher productivity, better jobs, and lasting poverty reduction”, the banker added.
The bank stressed that improving early childhood outcomes required a more integrated approach—bringing together nutrition, health, responsive caregiving, early learning, and children’s living environments, including access to water and sanitation, into a coherent and continuous package of support.
Other requirements include defining a basic package of services from pregnancy to age five, improving targeting and delivery, engaging private sector and community providers, and aligning financing and coordination with measurable outcomes.
In his remarks on the NDU report data, World Bank Lead Economist for Nigeria, Fiseha Haile, said: “The outlook for Nigeria’s economy remains cautiously optimistic. Growth is projected at 4.2% over 2026-2028, supported by continued macroeconomic stabilization, ongoing structural reforms, and increased investment. Inflation, which is still high, is expected to fall gradually, albeit more slowly than previously expected due to pressures from the Middle East conflict.”
