World Bank: Nigeria’s Economy Still Growing Despite Iran War and Rising Fuel Costs

Despite a war in Iran rattling global energy markets and pushing oil prices above $100 per barrel, Nigeria’s economy is still expected to grow in 2026, according to the World Bank.

The Washington-based institution delivered the assessment in Abuja on Tuesday, with its Lead Economist for Nigeria, Fiseha Haile, saying that business activity in the country has continued to expand over the past few months.

How Fast Is Nigeria Growing?

The World Bank projects Nigeria’s economy will grow by 4.2 per cent in 2026. That is a solid figure, particularly given the difficult global environment.

The growth is being supported by Nigeria’s ongoing economic reforms, a more stable naira, improved oil revenues from higher crude prices, and continued expansion in services, especially financial services, telecoms, and real estate.

Nigeria’s inflation has also been coming down. It fell to 15.1 per cent year-on-year in February 2026, down sharply from 26.3 per cent a year earlier, giving ordinary Nigerians some relief at the market.

What Is the Risk?

The World Bank is not sounding the alarm, but it is not giving Nigeria a clean bill of health either.

The main concern is fuel costs. The Iran war has disrupted global oil supplies, sending Brent Crude prices soaring to over $100 per barrel. While Nigeria earns more money when oil prices are high, it also pays more to import refined fuel and fertiliser. Higher energy costs push up the prices of food, transport, and manufacturing, hurting ordinary Nigerians.

If the conflict drags on, the World Bank warned that inflation, which has been cooling, could start rising again.

What Is the World Bank Advising Nigeria to Do?

Save the oil windfall. With crude prices high, Nigeria is earning more from oil exports. The World Bank says the government should save a significant portion of this extra income rather than spending it all, so there is a buffer when prices eventually fall.

Keep monetary policy tight. The CBN should resist the temptation to cut interest rates too quickly. Keeping rates firm helps control inflation and keeps foreign investors interested in Nigerian assets.

Avoid broad subsidies. Rather than bringing back blanket fuel or food subsidies, which are expensive and often benefit the wealthy more than the poor, the World Bank recommends targeted support for vulnerable households.