•Worried over 3.5m annual job entrants, raises growth forecast to 4.3%

Nigeria’s next economic frontier is moving from macroeconomic stabilisation to creating productive jobs, raising household incomes and reducing poverty, the World Bank has said.

In its October 2026 Africa Economic Update, released yesterday, the World Bank Group said sub-Saharan Africa’s economy remained resilient despite geopolitical tensions, climate shocks, declining development assistance and fiscal pressures.

It projected regional growth to rise from 4.1 per cent in 2025 to 4.3 per cent in 2026, 0.3 percentage points above its previous forecast.

The bank attributed the improved outlook to stronger macroeconomic resilience, rising domestic demand and investments linked to the global energy transition and digital technologies.

However, it warned that conflicts in the Middle East, trade policy uncertainty, tighter financial conditions, natural disasters, disease outbreaks and insecurity continued to weigh on economic activity across several countries.

It said the region’s growth remained insufficient to substantially reduce extreme poverty or create enough jobs for its rapidly expanding labour force.

For Nigeria, the World Bank raised its 2026 growth forecast to 4.3 per cent from four per cent in 2025, with growth projected at 4.4 per cent in both 2027 and 2028.

The upgraded outlook reflects improving macroeconomic stability, stronger investor confidence and a gradual recovery in private investment, it said.

But the bank cautioned that the significance of Nigeria’s improving growth would increasingly be measured not by GDP figures alone, but by the economy’s capacity to create sustainable and productive jobs.

Nigeria needs to absorb about 3.5 million people entering the labour force every year, making employment creation one of the biggest tests of the country’s economic recovery.

The World Bank said weak job creation and limited entrepreneurial opportunities remained persistent constraints, stressing that current growth was still insufficient to generate enough productive jobs and materially reduce poverty.

Nigeria’s real GDP growth has strengthened from the relatively weak performance recorded in the years preceding the current reform cycle. World Bank data put growth at 3.3 per cent in 2023, 3.4 per cent in 2024 and four per cent in 2025, with a further acceleration projected for this year.

The improvement indicates that the economy is gradually responding to reforms aimed at restoring macroeconomic stability. But the critical question is whether the expansion is occurring quickly enough, and in sufficiently productive sectors, to provide livelihoods for a rapidly growing working-age population.

The World Bank has repeatedly distinguished between employment and productive employment in Nigeria. Unemployment alone, it noted, does not fully capture the country’s poverty challenge because many Nigerians work but remain poor.

What people do for a living, the productivity of their activities and the income they earn are therefore critical determinants of whether employment can lift households out of poverty.

The bank said the 4.3 per cent growth forecast, while an improvement, should not automatically be interpreted as evidence of sufficient economic transformation.

For growth to translate into meaningful improvements in living standards, a greater share of economic activity must result in business expansion, increased investment, movement of workers into more productive occupations and rising real wages.

The World Bank estimates that 69.6 per cent of Nigerians lived below the lower-middle-income poverty line of $4.2 a day in 2025, while 50.8 per cent, equivalent to about 123 million people, lived in extreme poverty.

It nevertheless noted that the foundations for job-generating growth were stronger than in previous years.

According to the report, Nigeria has made progress in restoring macroeconomic stability, with easing inflation, a stronger external position, improved fiscal revenues and renewed investor confidence.

The improved macroeconomic conditions, it said, provide an opportunity for the country to move from stabilisation towards expanding productive capacity.
The employment challenge also places the private sector at the centre of Nigeria’s next phase of economic policy.

Government spending alone cannot generate the volume of sustainable jobs required to absorb the country’s rapidly expanding labour force. Private investment will therefore have to provide a significant share of the additional productive capacity.

This makes improvements in electricity supply, transport and logistics, access to finance, digital infrastructure, agricultural productivity and the broader business environment critical to the next phase of the recovery.

The World Bank said Nigeria’s employment challenge was inseparable from productivity, noting that education, skills, healthcare and early-childhood development would influence the productivity of the future workforce.