Agency Report
The World Bank has stated that Nigeria’s economy is set to grow in the first half of 2026 despite the Iran war, noting however that rising fuel costs and persistently high inflation risk squeezing incomes and slowing poverty reduction.
World Bank Nigeria lead economist Fiseha Haile stated this during the Nigeria Development Update (NDU) presentation in Abuja on Tuesday.
“Overall business activity has been expanding over the past few months, suggesting the impact on growth has been relatively contained. But the shock is still being felt through higher inflation,” Haile said.
Inflation eased sharply to 15.06% in February from around 33% in December 2024, but remains high compared with regional peers and has come under renewed pressure since the Middle East conflict began, Haile said.
“Fuel prices have risen more than 50% during the Iran war, feeding into transport, food and production costs.
“Inflation is still elevated and under increasing pressure, and that poses risks to incomes and poverty reduction,” Haile said.
“Nigeria’s fiscal deficit widened slightly to 3.1% of GDP in 2025, but remains lower than in pre-reform years,” Haile said, adding that “the debt‑to‑GDP ratio fell for the first time in a decade, helped by stronger fiscal performance and exchange rate valuation gains.
Also, the World Bank forecasts economic growth of about 4.2% for 2026 and urged authorities to save windfalls from higher oil prices, keep monetary policy tight, and avoid blanket subsidies to rein in inflation.
The World Bank also stated that Nigeria faces a deepening child development crisis, with approximately 110 out of every 1,000 children dying before the age of five, even as recent economic reforms begin to stabilise key macroeconomic indicators.
Mathew Verghis, World Bank country director for Nigeria, cautioned that inflation remains high and represents the most immediate threat to household welfare, stressing that lowering prices is critical to restoring purchasing power.
“We suggested in the last update that reducing high inflation is probably the single fastest way to allow people to feel the benefits of reforms,” Verghis said, noting that even at around 15%, price pressures continue to erode incomes significantly.
Verghis identified energy sector reform as the most urgent priority for unlocking growth, warning that gains in off-grid solar will fall short without fixing the country’s on-grid electricity system.
“Without that, Nigeria’s ambition of building a $1 trillion economy could remain out of reach,” Verghis stressed.
He also pointed to the need for stronger fiscal governance and deeper coordination across Nigeria’s decentralised system, with state governments expected to play a larger role in delivering critical infrastructure.
Only 10.5% women in paid jobs
Meanwhile, the World Bank’s latest gender data report shows that only 10.5 per cent of employed women in wage and salaried jobs as of 2025.
The World Bank report shows that while 80.7 per cent of Nigerian women aged 15 and above are active in the labour market, most are concentrated in low-quality jobs that offer little income security or social protection.
The disparity becomes more pronounced when compared with men. About 17 per cent of employed men in Nigeria are in wage and salaried roles, significantly higher than the 10.5 per cent recorded for women.
This gap also extends beyond Nigeria when benchmarked against peers.
Women’s wage employment in Nigeria trails the Sub-Saharan Africa average of 16.9 per cent, lower-middle-income countries at 26.5 per cent, and the global average of 54.6 per cent.
The report shows that Nigerian women are disproportionately engaged in vulnerable employment, with 79.1 per cent of female workers in such roles compared to 54.8 per cent of men.
“Vulnerable employment typically includes self-employment and unpaid family work, often lacking job security, stable income, and legal protections.
“Also, a significant share of women remains in agriculture. About 23.6 per cent of employed women work in the agricultural sector, compared to 42.7 per cent of men.
“While the female share in agriculture is lower than men’s, the sector still represents a major source of employment for women, often characterised by low productivity and earnings.
“Support systems for implementing gender-equal laws remain weak, with only 49 per cent of the necessary frameworks in place.
“Even more concerning, enforcement of these rights is estimated at just 34 per cent of its full potential,” the report said.
The report further noted that no reforms were introduced between October 2023 and October 2025 to address these gaps.
