Despite the spike in crude prices, structural constraints could slow Nigeria’s economic growth to 4.1 per cent this year, a 30-basis-point lower than 4.4 per cent the World Bank earlier projected.

In its latest World Economic Prospects report, the World Bank acknowledged the country could benefit from the higher global crude prices, which have gained over 40 per cent since the beginning of March.

But the bank was worried the longstanding structural weaknesses could continue to undermine the prospect of leveraging the oil windfall to drive faster growth.

The current administration has activated a suite of economic reforms to address legacy growth constraints and market rigidities.

But power crisis and poor infrastructure have continued to burden the economy, leaving the private sector weakly attractive to investors and local production regionally uncompetitive while opening the door to other countries such as China.

Reflecting on these concerns, the World Bank downgraded the country’s growth prospect by 0.3 percentage points for the year, with the pace expected to rise to 4.2 per cent and 4.3 per cent through next year to 2028. Next year’s growth was equally marked down by 0.2 percentage points.

Like Nigeria, like the entire sub-Saharan Africa (SSA), which is also struggling with structural challenges that have held the regional economy back for decades.

The same percentage points also marked the SSA growth prospect for the year, as that of Nigeria. The economy, unlike the January assessment, is now projected to grow at 4 per cent and finish next year at 4.4 per cent.

Ethiopia, which saw over seven per cent growth last year, is likely to continue as the SSA growth driver, with the prospect upgraded by 0.9 percentage points to eight per cent in the year.

The ceaseless geopolitical tension could hamper global growth in the year, with the World Bank discounting its January projection by 0.1 per cent.

At 2.5 per cent, it noted, the global economy could witness the slowest growth since the COVID-19 Pandemic, when production was locked down and energy prices saw the lowest levels in recent history.

The Bank acknowledged that reforms undertaken by the Federal Government, including exchange-rate liberalisation, improvements in public financial management and other business-enabling measures, have strengthened macroeconomic fundamentals and improved investor confidence.

But it noted that benefits were being increasingly offset by external shocks stemming from the Middle East conflict, leaving Nigeria’s overall growth trajectory weaker than anticipated at the start of the year.

Although higher oil prices could provide some support for government revenues and export earnings, persistent inflationary pressures, import dependence, foreign-exchange vulnerabilities and elevated debt-servicing obligations are expected to limit the extent to which the economy can leverage the commodity price upswing.

Crude gain growth has been stifled by divestment in the sector and theft. Only last month, the production was able to break the 1.5 million barrels per day (mbpd) ceiling. But the level was still a far cry compared to the budget projection of over two mbpd.

The escalating conflict in the Middle East is set to drag global economic growth to its weakest level since the COVID-19 pandemic, the World Bank warned, citing rising energy prices, accelerating inflation and worsening financing conditions across both advanced and developing economies.

According to the bank, the disruption is being driven largely by the closure of the Strait of Hormuz, a critical global energy transit route, which has sharply curtailed oil supplies and heightened uncertainty across commodity markets.

As a result, Brent crude oil prices are expected to average $94 per barrel in 2026, representing a 36 per cent increase from 2025 levels, based on assumptions that supply disruptions begin easing from July.

Fertiliser prices are also forecast to rise significantly, raising concerns over food inflation, particularly in import-dependent economies across Sub-Saharan Africa.

The combined effect of higher energy and food costs is expected to push global inflation to four per cent this year, up from 3.3 per cent in the previous year.