LAGOS, Oct 8 – Nigeria’s economy is projected to grow by an average of 4.4% annually through 2028, with inflation expected to moderate and poverty reduction to improve if the government maintains its reform programme and strengthens public service delivery, according to the World Bank.
The latest Nigeria Development Update points to continued improvements in macroeconomic stability following reforms including the removal of petrol subsidies and changes to the foreign-exchange regime. The World Bank said these measures have increased revenues available to state governments, creating additional fiscal space for infrastructure, education and healthcare spending.
Nigeria’s economy expanded by 4.2% in the first half of 2026, compared with 3.9% in 2025, with services and agriculture providing much of the growth momentum. The World Bank expects the expansion to remain resilient over the medium term, although translating stronger macroeconomic performance into higher household incomes will depend on investment, productivity and job creation.
Inflation is projected to decline toward 12% by 2028, from around 15%, provided macroeconomic reforms remain on track. The World Bank has continued to stress that lower inflation is important for restoring household purchasing power and accelerating poverty reduction.
Higher State Revenues Create Spending Space
State government finances have strengthened significantly since the implementation of the reforms. The World Bank estimates that state revenues increased by about 93% in real terms between 2023 and 2025.
The increase has created room for higher public spending, but the lender said states need to improve the efficiency and quality of that expenditure, particularly by directing more resources toward infrastructure and human capital.
The World Bank’s assessment also highlights an important limitation: higher revenues alone will not automatically translate into improved living standards. Public investment management, service delivery and the effectiveness of spending will determine how much of the additional fiscal space reaches households and businesses.
Focus Shifts From Stabilisation to Inclusive Growth
Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said the reforms had helped stabilise the economy and establish conditions for faster growth.
Oyedele said economic growth was now outpacing population growth, which he argued could support poverty reduction if the trend is sustained. He also said government policy remains focused on private-sector-led and job-rich growth.
For the World Bank, the next phase of Nigeria’s economic adjustment is therefore less about stabilisation alone and more about converting improved macroeconomic conditions into broader gains in productivity, employment and living standards.
The lender has identified stronger private investment, improved infrastructure, better human capital and more effective social protection as important conditions for sustaining growth and reducing poverty
