Nigeria’s Economy to Grow 4.2, 4% in 2026, 2027 -EBRD

European Bank for Reconstruction and Development (EBRD) has said Nigeria’s economy is set to grow by 4.2 per cent this year before moderating to 4.0 next year, as it revised downwards the growth for the sub-saharan Africa region.

Compared to its previous projection of 5.1 per cent growth for the region, the EBRD revised the growth projections down to 4.8 per cent whilst its expectations for Nigeira remained the same. In its economic outlook released on Thursday, the EBRD said “Nigeria’s economic growth is forecast to hold at 4.2 per cent for 2026, before moderating slightly to 4.0 per cent in 2027.”

According to the development bank, Nigeria’s growth is expected to be sustained by economic reforms, investment activity and improved external balances. “While growth remains resilient, higher energy prices, trade disruptions and climate-related risks continue to weigh on the outlook and moderate momentum.”

EBRD in its latest Regional Economic Prospects report, said economies in the SSA are expected to see a further moderation of growth in 2027 to 4.7 per cent. It noted that economic activity remained resilient in the first half of 2026, supported by services, agriculture and commodity exports.

However, the external environment has become more challenging; higher oil prices and disruptions to global trade routes linked to the conflict in the Middle East have driven up costs across the region, while fiscal vulnerabilities, El Niño-related risks and weaker cocoa prices continue to weigh on prospects in several markets.

Progress on reforms has strengthened confidence in a number of economies. Benin, Côte d’Ivoire and Ghana completed International Monetary Fund (IMF)-supported programmes in 2026, while Benin, Kenya, Ghana and Nigeria received sovereign rating upgrades during the year. However, high debt-servicing costs continue to constrain fiscal space in several countries.

In the near term, growth is expected to remain supported by agriculture, manufacturing, services and commodity production, although momentum is projected to soften as commodity windfalls fade.

The EBRD forecast that Benin’s economy will grow by 7.0 per cent in 2026, before easing slightly to 6.7 per cent in 2027, having successfully completed its IMF-supported programme in February 2026 and, in August, Moody’s upgraded the country’s sovereign rating by two notches to Ba3, citing fiscal consolidation and improved debt management.

“Growth is expected to be supported by expanding agricultural and industrial activity, as well as continued investment in the Glo-Djigbé Industrial Zone. Risks stem from sustained high oil and fertiliser prices, insecurity in the north, the continued closure of the Benin-Niger border and El Niño-related shocks.

Ghana’s economic growth is also expected at 5.0 per cent in 2026 and 2027, down from 6.4 per cent in the first half of 2026 supported by investment and consumption. It noted that inflation in the country remained relatively contained despite higher fuel costs, while the fiscal deficit narrowed significantly and public debt fell to 40.6 per cent of gross domestic product (GDP) from 62 per cent in 2024.

The IMF completed the final review of Ghana’s Extended Credit Facility programme in July 2026, while improvements in sovereign credit metrics supported investor confidence. Growth is expected to be increasingly driven by investment in oil, gas and transport infrastructure, although challenges in the cocoa sector and climate-related risks remain.

Kenya’s economy is is forecast to grow 4.7 per cent in 2026 and 4.6 per cent in 2027. EBRD noted that higher freight costs linked to trade disruptions have affected exports and contributed to renewed inflationary pressures.