By Seun Ibiyemi
President Bola Ahmed Tinubu has welcomed the World Bank’s October 2026 Nigeria Development Update, saying its findings indicate that the Federal Government’s economic reforms are strengthening public finances, supporting economic growth and creating room for increased investment in infrastructure and social services.
The report, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, highlights improvements in economic growth, external reserves and government revenues following reforms introduced since 2023, while noting that sustained growth is needed to achieve a gradual decline in poverty.
In a statement issued on Sunday by his Special Adviser on Information and Strategy, Bayo Onanuga, Tinubu said the report provided further evidence that the removal of petrol subsidy, unification of the foreign exchange market and measures to strengthen fiscal discipline were reshaping Nigeria’s economic outlook.
The President, however, acknowledged that more work was required to translate the reported gains into improved living conditions, particularly through lower food prices, job creation and better access to essential services.
According to the World Bank report, Nigeria’s economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent in the corresponding period of 2025, despite the effects of the conflict in the Middle East.
The international financial institution projected that economic growth would average at least 4.4 per cent between 2026 and 2028, while poverty was expected to decline gradually as economic output expanded faster than the population.
Tinubu welcomed the report’s finding that Nigeria’s poverty rate had stabilised for the first time since 2019, although the pace at which households experience meaningful improvements in their living standards remains a major concern.
The World Bank report also highlighted a significant moderation in inflation, which declined from 27.6 per cent in January 2025 to 15.2 per cent in December 2025.
However, higher global fuel prices associated with the Middle East conflict have slowed the pace of disinflation, with the bank projecting that inflation could ease to approximately 12 per cent by 2028.
Nigeria’s external position also improved during the period under review.
The current account surplus increased to $12bn, representing 7.0 per cent of gross domestic product, in the first half of 2026, compared with $8.6bn recorded a year earlier.
Gross external reserves also rose from $45.5bn at the end of 2025 to $53.8bn at the end of August 2026.
The administration has repeatedly cited improvements in macroeconomic indicators as evidence that its reforms are helping to stabilise the economy and strengthen the country’s capacity to withstand external shocks.
Nevertheless, the President acknowledged that macroeconomic improvements must translate into tangible benefits for households and businesses, particularly amid continuing concerns about food affordability, transportation costs and employment opportunities.
A major finding of the World Bank report was the impact of increased federation revenues on state government spending.
According to the report, reforms introduced since 2023 contributed to a 69 per cent increase in federation revenues in real terms between 2023 and 2025, with state governments emerging as the largest beneficiaries.
The additional resources enabled states to increase capital expenditure by 151 per cent in real terms over the same period.
Much of the increased spending went into roads and other transport infrastructure, agriculture, energy and housing.
The report further indicated that 29 of 33 states reviewed shifted their expenditure towards economic infrastructure, while real social spending per person increased in all but one state.
The findings underscore the growing importance of state governments in determining how additional public revenues translate into infrastructure development and improvements in public services.
Tinubu urged state governors to manage the increased allocations prudently and direct resources towards projects that improve the welfare of citizens.
He specifically called for greater prioritisation of initiatives that strengthen healthcare, education and other services affecting living standards.
The President’s appeal comes as state governments receive higher allocations following the fiscal changes implemented by his administration, placing greater emphasis on accountability, spending efficiency and the delivery of public infrastructure.
The World Bank report also identified improvements in states’ internally generated revenue (IGR), fiscal management and debt indicators.
Internally generated revenue increased in real terms in 31 of 35 states covered by the assessment, suggesting that revenue gains were not limited to federal allocations.
In addition, 21 states reduced their debt-to-GDP ratios between 2021 and 2025.
READ ALSO: NDLEA arrests 83-year-old woman again, seizes drugs worth millions in Nationwide crackdown
Nigeria’s overall public debt is projected to decline from 40.0 per cent of GDP in 2025 to 38.1 per cent in 2026, according to the report.
The indicators point to changes in revenue mobilisation and fiscal management across several tiers of government, although their long-term effects will depend on the sustainability of revenue growth and the quality of public expenditure.
For the Federal Government, the challenge is to ensure that increased revenues support productive investments without weakening fiscal discipline or creating additional pressures on public finances.
While defending the direction of the reforms, Tinubu said his administration would intensify efforts to ensure that economic gains were more widely shared.
He said the government would continue expanding targeted cash transfers, which the statement said had reached more than 10 million households.
The administration also plans to accelerate the deployment of compressed natural gas (CNG), raise agricultural productivity and improve access to affordable healthcare and quality education.
The measures form part of the government’s broader strategy to address the cost-of-living pressures associated with economic adjustments while supporting longer-term growth.
The President said the government would remain committed to the Renewed Hope Agenda, with a stronger focus on inclusive growth and the delivery of economic benefits to households across the country.
He stated that the difficult decisions taken since 2023 had increased government revenues, supported economic stabilisation and created additional fiscal space for investment.
However, he acknowledged that the reform process was not complete, stressing the need for continued action to lower food prices, create decent jobs for young Nigerians and improve household welfare.
Tinubu also commended the Economic Management Team, led by the Minister of Finance and Coordinating Minister of the Economy, alongside state governors and other stakeholders, for their role in implementing the reforms.
He urged state governments to sustain cooperation with the Federal Government while ensuring that additional revenues were channelled towards projects with measurable benefits for citizens.
The World Bank’s findings place state-level fiscal decisions at the centre of Nigeria’s economic reform debate, particularly as increased allocations create opportunities for capital investment and social spending.
The report’s emphasis on revenue growth and spending priorities also highlights the importance of examining not only how much governments receive but how effectively the funds are deployed.
For households, the ultimate test of the reforms will be whether improved economic indicators translate into more affordable food, better-paying jobs, reliable infrastructure and access to essential public services.
Tinubu said his administration would maintain its reform programme and intensify efforts to ensure that the resulting economic gains improve living conditions across the country.
