Services Sector To Drive Growth As World Bank Cuts Outlook

Nigeria’s economic expansion is set to rely heavily on the services sector in the coming years, even as the World Bank trims its growth projections for the country.

In its April 2026 Africa Economic Update, the global lender projected that Nigeria’s economy will grow by an average of 4.1 percent in 2026, lower than its earlier forecast, signalling a more cautious outlook amid global and domestic uncertainties.

Despite the downgrade, the report highlights sectors such as ICT, finance, and real estate as the key drivers expected to sustain economic activity, reflecting a gradual shift away from traditional growth anchors like agriculture and industry, which continue to face structural challenges.

The bank noted that improving macroeconomic stability, particularly by easing inflation and improving supply conditions, will support growth. Inflation is expected to decline significantly from 23 percent in 2025 to 14.9 percent in 2026, with further moderation projected in subsequent years.

However, the pace of recovery may be uneven. Persistent issues such as high fuel costs, linked partly to geopolitical tensions, alongside security concerns and policy uncertainty ahead of the 2027 elections, could weigh on investor confidence and slow reform momentum.

Across sub-Saharan Africa, growth is projected to remain steady at 4.1 percent in 2026, although several major economies, including Nigeria, have seen downward revisions. The report indicates that about 60 percent of countries in the region experienced similar downgrades, reflecting broader global economic pressures.

Even so, the World Bank emphasised that ongoing macroeconomic reforms such as tighter monetary policies and stabilising currencies are beginning to yield results, helping to cushion the impact of external shocks.

For Nigeria, the outlook suggests a delicate balance: while services-led growth and easing inflation offer some optimism, sustaining momentum will depend on addressing structural bottlenecks and maintaining policy consistency in an increasingly uncertain global environment.