Nigeria has achieved notable progress in restoring macroeconomic stability, yet translating these gains into inclusive growth and improved livelihoods requires stronger investment in people and job creation, beginning in early childhood. The April 2026 Nigeria Development Update (NDU), titled Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development, emphasizes that strengthening human capital is crucial for sustaining economic reform dividends. While recent policy measures have improved macroeconomic fundamentals, investments in early-life nutrition, health, caregiving, and learning are essential to foster long-term productivity and equitable growth.
In 2025, Nigeria’s economy grew by 4.0%, driven primarily by services such as ICT, financial services, and real estate, while other sectors saw mild expansion. Inflation declined to 15.1% year-on-year in February 2026, supported by tighter monetary policy, reduced exchange rate volatility, and improved food supply. Despite these gains, household incomes remain below pre-crisis levels and poverty persists, highlighting the need to pair stabilization with policies that enhance economic opportunities and job creation.
Nigeria’s external position remained favorable in 2025, aided by higher non-oil exports, resilient remittances, and renewed portfolio inflows. The current account surplus reached 4.8% of GDP, while gross external reserves increased to $45.5 billion, equivalent to 8.7 months of imports. On the fiscal front, stronger non-oil revenues boosted Federation Account receipts to 8.5% of GDP, although fiscal pressures widened the consolidated deficit modestly to 3.1% of GDP. External factors, including the Middle East conflict, are expected to have mixed but manageable impacts, raising energy and shipping costs while providing revenue gains from higher oil prices. Policymakers are advised to maintain flexible exchange rates, tighten monetary policy, and use fiscal windfalls to support vulnerable households selectively.
The NDU highlights that macroeconomic stability alone is insufficient to improve living standards. Human capital development, particularly during pregnancy and early childhood, is key to converting reform gains into long-term productivity, better jobs, and poverty reduction. Current early childhood outcomes in Nigeria remain poor and unequal, with high child mortality, widespread stunting, and many children not developmentally on track before school. Addressing these gaps requires integrated interventions in nutrition, health, responsive caregiving, early learning, and living environments, supported by coordinated financing, community engagement, and measurable outcomes.
Looking ahead, Nigeria’s economic growth is projected at 4.2% over 2026–2028, supported by continued stabilization, structural reforms, and increased investment. While inflation remains elevated, it is expected to decline gradually. The NDU underscores that investments in early childhood provide a powerful lever to strengthen productivity, generate better employment opportunities, and ensure that macroeconomic gains translate into lasting improvements in the welfare of Nigerians.
