The European Bank for Reconstruction and Development (EBRD) has lowered its economic growth forecast for sub-Saharan Africa, but maintained its projection for Nigeria at 4.2 percent in 2026.
The bank expects Nigeria’s economy to grow by 4.2 percent this year before moderating slightly to 4.0 percent in 2027. It said economic reforms, investment activity and improved external balances are expected to support growth.
The unchanged Nigerian forecast comes as the EBRD reduced its broader growth outlook for sub-Saharan Africa to 4.8 percent in 2026, from an earlier projection of 5.1 percent. Regional growth is expected to ease further to 4.7 percent in 2027. (BusinessDay)
The EBRD said economic activity across the region remained resilient in the first half of 2026, supported by services, agriculture and commodity exports. However, higher energy prices and disruptions to global trade routes linked to the conflict in the Middle East have increased costs and created additional pressure on economies. (ebrd.com)
For Nigeria, the bank said growth would be supported by continued reforms, investment and stronger external balances. However, higher energy costs, trade disruptions and climate-related risks could limit the pace of expansion.
The regional outlook also faces pressure from weaker commodity prices, El Niño-related risks and higher freight costs. The EBRD expects agriculture, manufacturing, services and commodity production to remain important drivers of growth, although momentum could weaken as commodity windfalls fade.
The bank noted that progress on economic reforms has helped strengthen investor confidence in several African countries. It also highlighted sovereign rating upgrades recorded by countries including Nigeria, Ghana, Benin and Kenya during 2026.
Despite these improvements, high debt-servicing costs remain a major constraint on fiscal space in several African economies, limiting governments’ ability to respond to rising energy and other external costs.
Nigeria’s outlook is therefore being supported by its ongoing economic reforms and improving external position, while external shocks and climate-related risks remain potential challenges to growth. (ebrd.com)
