Nigeria’s economy is expected to experience slower growth in 2027 as falling global oil prices may reduce the country’s revenue from exports, according to a new report released by the African Development Bank Group.
In its African Economic Outlook 2026 report, the bank projected that Nigeria’s economy would grow by 4.1 per cent in 2026 before slowing to 3.7 per cent in 2027. The report explained that the expected decline would mainly be caused by weaker oil prices in the global market, which could reduce foreign earnings and government income.
The AfDB estimated that Nigeria’s economy would grow by 4.0 per cent in 2025. It added that the slight improvement expected in 2026 would be supported by stronger oil production, better oil prices, growth in the services sector, and increased government investment in infrastructure such as electricity, transportation, and logistics.
According to the bank, Nigeria’s economy remains heavily dependent on oil revenue, making it vulnerable to changes in the global energy market. Once oil prices begin to weaken again, economic growth may lose momentum.
Beyond Nigeria, the report warned that African economies still face several major risks. These include rising inflation, unstable exchange rates, supply chain disruptions, and tougher global financial conditions. The bank said higher fuel and fertiliser prices could hurt agriculture, increase food shortages, and push inflation even higher across the continent.
The AfDB also warned that central banks in many African countries may be forced to raise interest rates further in order to control inflation. However, tighter monetary policies could reduce lending to businesses and slow economic activities.
The report noted that prolonged global economic shocks may increase debt burdens for African nations, raise borrowing costs, weaken government finances, and reduce spending on important sectors such as healthcare, education, and infrastructure.
To reduce these risks, the bank urged African governments to adopt stronger fiscal and monetary reforms. It advised countries to improve tax collection systems, expand their tax base, digitise tax administration, and ensure transparency in the use of public funds.
The AfDB also encouraged African nations to attract more foreign investment, especially in growing sectors like renewable energy and data centres. According to the institution, maintaining stable economies and strengthening local financial markets will help sustain investor confidence.
The President of the AfDB Group, Sidi Ould Tah, said Africa has continued to show resilience despite global economic challenges, climate change, geopolitical tensions, and the lasting effects of the COVID-19 pandemic.
He explained that Africa’s economy grew by an average of 4.4 per cent in 2025, making the continent one of the fastest-growing regions in the world. However, he stressed that Africa needs to achieve annual growth rates of at least seven per cent over several years to create enough jobs and reduce poverty significantly.
The report also revealed that Africa could unlock as much as $1.43 trillion in additional financing each year if governments improve resource management and reduce inefficiencies. It added that poor tax systems and weak policy implementation continue to limit revenue generation across many African countries.
For West Africa, the AfDB projected that economic growth would remain relatively stable at 4.7 per cent in 2026 and 4.5 per cent in 2027. The bank also noted that 10 out of the region’s 15 countries are expected to record economic growth of at least five per cent in 2026, placing them among Africa’s fastest-growing economies.
