ABUJA, Nigeria (VOICE OF NAIJA)-The African Development Bank Group has projected that Nigeria’s economic growth will slow to 3.7 per cent in 2027 due to declining global oil prices and reduced external revenue inflows, despite a slight improvement expected in 2026.
In its African Economic Outlook 2026 report, the AfDB said Nigeria’s economy is projected to grow from an estimated 4.0 per cent in 2025 to 4.1 per cent in 2026 before easing to 3.7 per cent in 2027.
The bank attributed the 2026 projection to higher oil production and prices, expansion in the services sector, and increased public investment in electricity, transport and logistics.
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The AfDB stated, “Growth in Nigeria, the region’s largest economy, is projected to increase marginally from an estimated 4.0 per cent in 2025 to 4.1 per cent in 2026, supported by increasing oil prices and production, growth in the services sector, and increased public investment in electricity, transport, and logistics. In 2027, growth is projected to decelerate to 3.7 per cent on account of the anticipated easing of global oil prices and thus reduced external revenue inflows.”
The bank warned that Africa’s medium-term economic outlook remains exposed to supply chain disruptions, inflationary pressures, currency depreciation and tightening global financial conditions.
It said rising fuel and fertiliser costs could weaken agricultural output, worsen food insecurity and intensify inflation across the continent.
The report added that sustained inflationary pressures could compel African central banks to further tighten monetary policy, potentially limiting credit to the private sector and slowing growth.
It further stated that prolonged global shocks could increase debt vulnerabilities, raise borrowing costs, weaken fiscal positions and constrain public investment and social spending across African economies.
The AfDB called for coordinated fiscal, monetary and structural reforms across African countries to mitigate the impact of global shocks.
The report stated, “Addressing the adverse impacts of successive waves of shocks and increasing geopolitical fragmentation on African countries requires a holistic approach, comprehensive policy, and financing. African central banks need to implement prudent monetary and exchange rate policies tailored to anchoring long-term inflation expectations.”
It also urged African countries to strengthen domestic revenue mobilisation through broader tax bases, improved tax administration, digitalisation and enhanced transparency in public resource management.
The bank said African economies must improve their ability to attract and retain external financial flows, particularly in emerging sectors such as renewable energy and data centres, while maintaining macroeconomic stability and deepening domestic financial markets.
It added that proactive crisis response measures, including contingency financing arrangements, diversified fuel and fertiliser sourcing and temporary liquidity support for distressed businesses, were necessary to strengthen resilience.
In the foreword to the report, President of the African Development Bank Group, Sidi Tah, said Africa continues to show resilience despite global and regional economic pressures.
Tah said, “Africa stands at a critical juncture in its development journey. Its economies continue to demonstrate remarkable resilience despite numerous concurrent challenges, such as escalating trade tensions, the intensifying effects of climate change, the effect of the COVID-19 pandemic, declining international aid and foreign direct investment, increased global and regional conflicts, and ongoing geopolitical fragmentation.”
He added that Africa’s economies grew in 2025, with average real GDP rising to 4.4 per cent, making the continent one of the fastest-growing regions globally.
Tah noted that sustained and inclusive growth would require significantly higher investment levels.
“Achieving sustained and inclusive growth will require a substantial increase in investment.
Africa must raise annual growth to 7 per cent or higher, sustained over decades, to enable large-scale job creation and accelerated poverty reduction,” he stated.
The report said Africa could unlock up to $1.43tn in additional annual financing by addressing inefficiencies in resource mobilisation and utilisation, adding that about $469bn remains untapped due to weak tax compliance and policy design, while over 40 per cent of public investment is lost to inefficiencies.
It projected West Africa’s growth at 4.7 per cent in 2026 and 4.5 per cent in 2027, compared to 4.8 per cent in 2025, with 10 of 15 countries in the region expected to grow by at least five per cent in 2026.