Nigeria’s economic growth is expected to ease in 2027 as lower global oil prices weigh on external revenues, despite a modest improvement projected for the country’s economy in 2026, according to the latest outlook from the African Development Bank Group.
In its African Economic Outlook 2026 report, the AfDB forecast that growth in Africa’s largest economy would edge up from an estimated 4.0 percent in 2025 to 4.1 percent in 2026, supported by higher oil production and prices, expansion in the services sector, and increased public investment in electricity, transport and logistics infrastructure.
However, the bank projected that growth would slow to 3.7 percent in 2027 as global oil prices ease, reducing export earnings and government revenue.
“Growth in Nigeria, the region’s largest economy, is projected to increase marginally from an estimated 4.0 percent in 2025 to 4.1 percent in 2026,” the report said, adding that the anticipated slowdown in 2027 reflects weaker external revenue inflows linked to lower oil prices.
The AfDB warned that Africa’s medium-term economic outlook remains exposed to multiple risks, including supply-chain disruptions, persistent inflationary pressures, currency depreciation and tighter global financial conditions.
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According to the report, rising fuel and fertiliser costs could undermine agricultural production, worsen food insecurity and sustain inflationary pressures across the continent. Elevated inflation may also compel central banks to maintain tighter monetary policies, potentially restricting credit to businesses and slowing economic activity.
The bank cautioned that prolonged global shocks could increase debt vulnerabilities, raise borrowing costs and weaken fiscal balances, limiting governments’ ability to invest in infrastructure and social programmes.
To strengthen economic resilience, the AfDB urged African countries to pursue coordinated fiscal, monetary and structural reforms. It recommended prudent monetary and exchange-rate policies aimed at anchoring inflation expectations while preserving macroeconomic stability.
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The report also called for stronger domestic resource mobilisation through broader tax bases, digitalised tax administration systems and improved transparency in public finance management.
The AfDB said African economies should enhance their ability to attract and retain foreign capital, particularly in emerging sectors such as renewable energy and data centres, while deepening domestic financial markets to sustain investor confidence.
The bank further recommended contingency financing arrangements, diversified sourcing of fuel and fertiliser supplies, and temporary liquidity support for distressed businesses as part of broader crisis-response strategies.
In the report’s foreword, AfDB President Sidi Ould Tah said Africa had demonstrated resilience despite a challenging global environment marked by trade tensions, climate change, reduced development assistance, geopolitical fragmentation and ongoing conflicts.
“Africa stands at a critical juncture in its development journey,” Tah said, noting that the continent’s economies expanded by an average of 4.4 percent in 2025, making Africa one of the world’s fastest-growing regions.
He said achieving sustained and inclusive growth would require annual economic expansion of at least 7 percent over several decades to generate sufficient jobs and significantly reduce poverty.
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The report estimated that Africa could unlock as much as US$1.43 trillion in additional annual financing by improving the mobilisation and use of domestic resources. It noted that nearly US$469 billion remains untapped due to weaknesses in tax compliance, administration and policy design, while more than 40 percent of public investment is lost through inefficiencies.
For West Africa, the AfDB projected economic growth of 4.7 percent in 2026 and 4.5 percent in 2027, compared with an estimated 4.8 percent in 2025. The bank said 10 of the region’s 15 countries are expected to record growth of at least 5 percent in 2026, placing them among Africa’s fastest-growing economies.
