President Bola Tinubu has welcomed the World Bank’s latest assessment of Nigeria’s economy, describing its findings as evidence that his administration’s economic reforms are beginning to strengthen growth, government revenues and the country’s external financial position.
Tinubu’s reaction followed the release of the World Bank’s October 2026 Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities. The report, published on October 8, examined Nigeria’s economic performance and how increased public revenues have influenced spending decisions by state governments.
In a statement issued on Sunday, the President said the findings showed that the economy was on a firmer footing for sustained growth, while acknowledging that further work was needed to translate improvements in economic indicators into better living conditions for households.
“These findings confirm that the difficult but necessary decisions to remove the petrol subsidy, unify the foreign exchange market and strengthen fiscal discipline have raised revenues, stabilised the economy and created fiscal space for every tier of government to invest in its people,” Tinubu said.
The World Bank reported that Nigeria’s real gross domestic product grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent during the corresponding period in 2025. It attributed the improvement largely to activity in the services sector and a stronger contribution from agriculture. The bank projects average economic growth of about 4.4 per cent between 2026 and 2028.
The report also found that the poverty rate had stabilised for the first time since 2019, although it cautioned that sustained economic growth and improvements in productivity would be needed to reduce poverty and improve living standards over time.
Tinubu cited the finding as a sign of progress but said the administration would intensify efforts to ensure the benefits of economic reforms reached more Nigerians.
“The dividends of reform are becoming visible. But more work remains to ensure they fully translate into better living standards for every household, starting with lower food prices and decent jobs for our young people,” he said.
On inflation, the World Bank reported that Nigeria’s headline inflation rate fell from 27.6 per cent in January 2025 to 15.2 per cent in December 2025. However, higher global oil prices associated with the conflict in the Middle East, alongside seasonal food-price pressures, slowed further progress in bringing inflation down. The bank expects inflation to ease gradually to around 12 per cent by 2028.
Nigeria’s external position also improved during the first half of 2026. The current account surplus increased to $12 billion, equivalent to about 7.1 per cent of GDP, from $8.6 billion, or 6.7 per cent of GDP, in the same period of 2025. Gross external reserves rose above $54 billion in September, according to the World Bank’s latest update.
A central focus of the report was the effect of economic reforms on revenue distribution and state-level spending. The bank estimated that gross federation revenues increased by 69 per cent in real terms between 2023 and 2025, reflecting changes including petrol subsidy removal, exchange-rate reforms and stronger revenue administration.
State governments received the largest increase in federation revenue flows and used the additional resources to expand capital expenditure, particularly on transport infrastructure, housing, agriculture and other economic development projects. The report said aggregate state revenues rose by approximately 93 per cent in real terms over the period, while expenditure increased by about 92 per cent.
The report nevertheless highlighted the need to improve the quality and accountability of public spending. Although expenditure on health, education and social protection increased, economic infrastructure accounted for a substantial share of additional state investment. Education’s share of total state expenditure fell from 14.9 per cent in 2021 to 12.1 per cent in 2025, while health spending remained broadly stable at about seven per cent.
Tinubu urged state governments to use their increased revenues more effectively, particularly in sectors that directly affect people’s welfare.
“I urge state governments to use their higher revenues more prudently and prioritise projects that improve the living standards of Nigerians, and the health and education of our people,” he said.
The President also pledged to expand social protection and accelerate initiatives intended to reduce household costs and create economic opportunities. He said targeted cash transfers had reached more than 10 million households and promised further action to increase the use of compressed natural gas, improve agricultural productivity and widen access to affordable healthcare and quality education.
“Our administration will stay the course of reform and redouble its focus on inclusive growth under the Renewed Hope Agenda,” Tinubu said.
The World Bank has similarly stressed that stronger macroeconomic indicators will not automatically translate into broad improvements in living standards. Its October update argues that Nigeria must sustain economic reforms while improving public-service delivery, encouraging private investment and creating more jobs. It also calls for better spending efficiency and accountability at the state level.
