Nigeria’s growth upgrade is welcome, but turning it into jobs is the real test

When the World Bank raised Nigeria’s 2026 growth projection to 4.4 percent, it offered something the country has been short of in recent years: cautious optimism backed by data. After a prolonged period of macroeconomic stress marked by currency volatility, inflation spikes and weak investor confidence, an upward revision matters. It signals that reforms, however painful, are beginning to stabilise the economy. But growth numbers alone do not tell the full story.

The more pressing question is not whether Nigeria will grow faster on paper, but whether that growth will translate into jobs, incomes, and tangible improvements in living standards.

The World Bank now estimates that Nigeria’s economy grew by 4.2 percent in 2025 and is projected to expand at 4.4 percent in both 2026 and 2027. These figures place Nigeria above the global average, which the Bank expects to hover around 2.6 to 2.7 percent over the same period. On the surface, that is encouraging. It suggests Africa’s largest economy is regaining momentum after years of underperformance.

Yet Nigeria’s challenge has never been growth in isolation. It has been the quality and distribution of that growth.

For over a decade, Nigeria has struggled with what economists describe as jobless growth. Output expands, often driven by capital-intensive sectors such as oil, telecoms or finance, while employment lags behind population growth. With millions of young Nigerians entering the labour market every year, a 4.4 percent growth rate, while respectable, is unlikely to be sufficient on its own.

The World Bank itself acknowledges this tension. In its latest Global Economic Prospects report, it warns that global growth, though resilient, is concentrated in advanced economies and is unlikely to reduce extreme poverty. The 2020s, it says, are on track to be the weakest growth decade since the 1960s. That warning is particularly relevant for Nigeria, where poverty remains widespread, and inequality continues to deepen.

Part of the growth upgrade reflects external factors rather than purely domestic strength. Stronger-than-expected performance in the United States accounts for a significant share of the upward revision to global forecasts. Easing global financial conditions and fiscal expansion in major economies are also expected to cushion the slowdown as trade-related boosts fade. Nigeria benefits indirectly from this environment through capital flows, commodity prices and external demand.

However, reliance on favourable global winds is not a development strategy.

At home, Nigeria’s reform agenda remains incomplete and uneven. The removal of fuel subsidies and the unification of the exchange rate were necessary steps, but they came with immediate social costs. Inflation eroded purchasing power, while wage growth lagged behind rising prices. Without parallel investments in productivity, infrastructure and human capital, macroeconomic stabilisation risks becoming an end in itself rather than a means to broad-based prosperity.

This is where the World Bank’s chief economist, Indermit Gill, strikes a more sobering note. He warns that the global economy is becoming less able to generate growth even as it appears more resilient to shocks. According to him, economic dynamism and resilience cannot diverge indefinitely without straining public finances and credit markets. His prescription is blunt: governments must liberalise private investment and trade, rein in public consumption, and invest aggressively in technology and education.

For Nigeria, this message lands close to home. Private investment remains constrained by policy uncertainty, weak contract enforcement and persistent infrastructure gaps. Power shortages raise production costs. Logistics inefficiencies undermine competitiveness. Skills mismatches leave many young people unemployed or underemployed, even as firms struggle to find qualified workers. These are structural problems that growth forecasts do not automatically fix.

There is also a fiscal reality to confront. Nigeria is carrying a rising public debt with limited revenue buffers. While growth helps, it does not eliminate the need for hard choices about spending priorities, tax reform, and public-sector efficiency. Without stronger revenue mobilisation and better spending discipline, higher growth could still coexist with fragile public finances.

None of this is to dismiss the significance of the World Bank’s upgrade. Confidence matters in economics. Expectations shape investment decisions. A credible signal that Nigeria’s economy is stabilising can unlock capital and encourage long-term planning. But optimism must be anchored in realism.

A 4.4 percent growth rate is a platform, not a destination. Given Nigeria’s demographics, it should be viewed as the minimum required to stand still, not a benchmark for success. The real test will be whether growth becomes more inclusive, more labour-intensive and more resilient to shocks.

Nigeria has been here before, celebrating growth numbers that failed to change everyday realities. The opportunity now is to break that pattern. Growth is returning. The harder work is ensuring it counts.

Victor Ejechi is the head of insights and storytelling at SBM Intelligence.

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