ABUJA, Nigeria — President Bola Tinubu has welcomed the World Bank’s October 2026 Nigeria Development Update, describing its findings as evidence that his administration’s economic reforms are strengthening public finances, improving macroeconomic stability and creating room for increased investment in infrastructure.

The report, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, highlights stronger economic growth, improved external balances and increased revenue allocations to state governments following reforms introduced since 2023.

However, the World Bank’s assessment also underscores the challenge of translating improving economic indicators into sustained reductions in poverty and better living conditions for Nigerian households.

According to the report, Nigeria’s economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent in the corresponding period of 2025. The Bank projects average economic growth of at least 4.4 per cent between 2026 and 2028.

Tinubu said the findings showed that the removal of petrol subsidies, unification of the foreign exchange market and measures to strengthen fiscal discipline were beginning to deliver results.

The President also welcomed the report’s finding that Nigeria’s poverty rate had stabilised for the first time since 2019, with the World Bank expecting poverty to decline gradually if economic growth continues to outpace population growth.

He acknowledged, however, that more needed to be done to ensure that the gains from the reforms translated into lower food prices, better employment opportunities and improved living standards.

Nigeria’s economy records stronger growth

The World Bank’s latest projections point to continued economic expansion, although the pace of improvement will depend on domestic policy implementation and external conditions.

Inflation declined from 27.6 per cent in January 2025 to 15.2 per cent in December 2025, according to the report. However, higher global fuel prices associated with the conflict in the Middle East have slowed the subsequent disinflation process.

The Bank expects inflation to ease to about 12 per cent by 2028.

For households and businesses, the trajectory of inflation remains important because price stability affects purchasing power, operating costs, investment decisions and the cost of living.

A sustained decline in inflation could provide relief to consumers, although slower inflation does not necessarily mean that prices will return to previous levels.

Tinubu said his administration would maintain its reform programme while placing greater emphasis on inclusive growth and measures to improve household welfare.

External reserves rise to $53.8bn

Nigeria’s external position also strengthened during the first half of 2026, according to the World Bank.

The country’s current account surplus increased to $12 billion, equivalent to 7 per cent of gross domestic product, in the first half of 2026, compared with $8.6 billion in the corresponding period of 2025.

Gross external reserves rose from $45.5 billion at the end of 2025 to $53.8 billion at the end of August 2026.

The stronger external position could improve Nigeria’s capacity to meet international payment obligations and withstand external shocks, although sustained stability will depend on foreign-exchange inflows, export performance and broader economic conditions.

The report also projects that Nigeria’s public debt will decline from 40 per cent of GDP in 2025 to 38.1 per cent in 2026.

States emerge as major beneficiaries of reforms

A central finding of the World Bank report is that Nigeria’s economic reforms have increased revenues available to the three tiers of government, with state governments emerging as the largest beneficiaries.

Federation revenues rose by 69 per cent in real terms between 2023 and 2025, according to the report.

The additional resources enabled state governments to increase capital expenditure by 151 per cent in real terms over the same period, with much of the spending directed towards roads and other transport infrastructure, agriculture, energy and housing.

The Bank found that 29 of 33 states shifted their spending towards economic infrastructure, while real social spending per person increased in all but one state.

Internally generated revenue also grew in real terms in 31 of 35 states covered by the report.

In addition, 21 states reduced their debt-to-GDP ratios between 2021 and 2025, suggesting that some subnational governments have used the improved fiscal environment to strengthen their financial positions.

The findings place greater responsibility on state governments to ensure that increased revenue translates into productive public investment, improved public services and measurable benefits for residents.

Tinubu urged governors to manage their additional resources prudently and prioritise projects that improve living standards, particularly in healthcare, education and essential infrastructure.

Tinubu pledges stronger social protection

Despite the improvement in headline economic indicators, the President acknowledged that the benefits of reform had yet to reach all Nigerians.

He said the administration would expand targeted cash transfers, which he stated had already reached more than 10 million households, while accelerating the deployment of compressed natural gas (CNG) and improving agricultural productivity.

The government also plans to improve access to affordable healthcare and quality education as part of its efforts to make economic growth more inclusive.

Tinubu said the administration would sustain its reform agenda under the Renewed Hope programme, with greater emphasis on employment, food affordability and the distribution of economic gains.

The effectiveness of these measures will be critical to determining whether improved government revenues and macroeconomic stability lead to lasting reductions in poverty.

For households facing high living costs, the key test will be whether rising public revenues translate into more affordable essential goods, better employment prospects and improved access to public services.

Growth must translate into better living standards

The World Bank’s assessment presents a mixed picture of Nigeria’s economic recovery: growth has strengthened, external reserves have increased and government revenues have improved, but the challenge of converting these gains into broad-based prosperity remains.

The increase in state-level capital spending could support productivity and economic activity if projects are well selected, transparently executed and maintained. However, higher expenditure alone does not guarantee better outcomes without effective public financial management and accountability.

Similarly, the projected decline in inflation and poverty will depend on whether growth remains strong enough to improve household incomes and outpace population growth.

Tinubu commended the federal economic management team, state governors and other stakeholders for their roles in implementing the reforms, insisting that the administration would continue pursuing policies aimed at delivering shared prosperity.

The next phase of Nigeria’s economic reform programme will therefore be judged not only by revenue growth, foreign reserves or fiscal indicators, but also by its ability to create jobs, improve purchasing power and raise living standards across the country.