Nigeria is set to maintain a 4.2 percent growth rate in 2026 despite a weaker external environment that has forced the European Bank for Reconstruction and Development (EBRD) to downgrade its outlook for sub-Saharan Africa.
The EBRD retained its forecast for Nigeria at 4.2 percent this year but expects growth to moderate to 4.0 percent in 2027, according to its latest Regional Economic Prospects report.
The unchanged Nigerian forecast stands in contrast to the bank’s revised outlook for its sub-Saharan African economies. Regional growth is now projected at 4.8 percent in 2026, down from 5.1 percent previously, before easing to 4.7 percent in 2027.
The EBRD attributed Nigeria’s resilience to economic reforms, investment activity and improved external balances, although it warned that higher energy prices, disruptions to global trade and climate-related risks would continue to weigh on momentum.
The EBRD said economic activity across sub-Saharan Africa remained resilient in the first half of 2026, supported by services, agriculture and commodity exports.
That resilience, however, is being tested by higher oil prices and disruptions to global trade routes linked to the conflict in the Middle East, which have increased costs across the region. Fiscal vulnerabilities, El Niño-related risks and weaker cocoa prices are also weighing on several economies.
The bank expects agriculture, manufacturing, services and commodity production to continue supporting regional activity in the near term, although it sees momentum softening as commodity windfalls fade.
For Nigeria, the combination of stronger external balances and ongoing reforms provides some cushion against these pressures. But higher energy and freight costs could feed into operating expenses and inflation, creating challenges for businesses and consumers.
The EBRD’s assessment also highlights the growing role of fiscal and structural reforms in supporting investor confidence across African markets.
Benin, Côte d’Ivoire and Ghana completed IMF-supported programmes in 2026, while Benin, Kenya, Ghana and Nigeria received sovereign rating upgrades during the year. At the same time, high debt-servicing costs continue to restrict fiscal space in several countries.
Nigeria’s unchanged growth forecast therefore comes at a time when reforms are increasingly being reflected in the assessment of African economies by international investors and development institutions.
The key issue for Nigeria will be whether reform-driven improvements in investment and external balances can translate into sufficiently broad-based economic expansion to sustain growth as external conditions deteriorate.
The EBRD forecasts significantly stronger growth for some West African economies.
Benin is expected to grow 7.0 percent in 2026 before moderating to 6.7 percent in 2027, supported by agricultural and industrial activity and continued investment in the Glo-Djigbé Industrial Zone.
Ghana is projected to expand 5.0 percent in both 2026 and 2027, down from 6.4 percent in the first half of this year. The EBRD said investment and consumption have supported activity, while fiscal consolidation and lower public debt have strengthened investor confidence.
Kenya’s economy is forecast to grow 4.7 percent in 2026 and 4.6 percent in 2027. Higher freight costs linked to trade disruptions have affected exports and contributed to renewed inflationary pressures.
The EBRD’s decision to retain its 4.2 percent growth forecast for Nigeria in 2026, even as it lowered its projection for sub-Saharan Africa, points to relative resilience in the Nigerian economy.
But the forecast of a moderation to 4.0 percent in 2027 suggests that resilience should not be interpreted as accelerating growth.
The bank identified economic reforms, investment activity and stronger external balances as key supports for Nigeria’s expansion. However, higher energy costs, disruptions to global trade and climate-related risks could test those gains.
