Nigeria’s economy grew by 4.2% in the first half of 2026, according to the World Bank’s latest report. This growth comes as state revenues increased by about 93%, allowing for more spending on infrastructure.
The report, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,” noted that this growth is an improvement from 3.9% in the first half of 2025 and 3.5% in 2024. Much of the growth is attributed to the services sector and a stronger contribution from agriculture.
Despite this positive trend, the World Bank highlighted that inflation continues to affect household purchasing power. The report indicated that Nigeria’s economic performance has improved in terms of growth and public finances, but emphasized the need for ongoing reforms and better public services to ensure that the benefits reach all citizens.
From 2023 to 2025, gross federation revenues rose by 69%, mainly due to changes in exchange rates, the removal of fuel subsidies, and better revenue collection. States saw the largest increases in revenue, benefiting from various federal funds and improved tax collections.
With these additional resources, states increased their capital spending, particularly in transport, housing, and agriculture. However, spending on education and health did not grow as quickly, with education’s share of total spending decreasing from 14.9% in 2021 to 12.1% in 2025.
Mathew Verghis, the World Bank’s Country Director for Nigeria, stated that the revenue growth offers a chance to enhance essential services and create jobs. He stressed the importance of efficient spending and accountability to ensure that public resources improve the lives of Nigerians.
The report also discussed the mixed effects of the ongoing conflict in the Middle East on Nigeria’s economy. While higher oil prices boosted export earnings and current account surplus, they also led to increased fuel prices and food costs, slowing down the reduction of inflation.
The World Bank forecasts an average economic growth of 4.4% from 2026 to 2028, with inflation expected to gradually decrease to around 12% by 2028, and a decline in poverty levels anticipated.
[logo-slider]
