Nigeria’s economic outlook for 2026 is cautiously upbeat. The Central Bank of Nigeria (CBN) projects stronger growth, lower inflation, and healthier external reserves. Yet fiscal pressures and global risks remain.
The apex bank expects Africa’s largest economy to expand by 4.49% in 2026, compared with 3.89% in 2025. Headline inflation is forecast to ease to 12.94%, down from 21.26% in 2025.
CBN officials say reforms in foreign exchange, taxation, fiscal coordination, and oil have begun to deliver results. “Two years of reforms are crystallising into tangible gains,” the bank noted in its outlook.
The projections come against a mixed global backdrop. World growth slowed to 3.20% in 2025, down from 3.30% in 2024, as trade tensions lingered and demand weakened.
Global inflation moderated to 4.20%, aided by lower energy costs and improved supply chains. Financial conditions eased as central banks relaxed policies and investor confidence improved.
The CBN believes this environment supports emerging markets like Nigeria, provided reforms continue.
Domestic Gains in 2025
Nigeria’s economy grew 3.89% in 2025, up from 3.38% in 2024. Oil and non-oil sectors contributed.
Inflation pressures eased after the rebasing of the Consumer Price Index. Headline inflation fell from 24.48% in January 2025 to an annual average of 21.26%. Tight monetary policy, fiscal coordination, and exchange rate stability helped.
Federal revenue rose to ₦34.82 trillion, 22% higher than 2024. Public debt dropped to 33.98% of GDP, down from 38.80% in 2024.
Nigeria also recorded a $5.80 billion balance of payments surplus. Reserves climbed to $45.01 billion, while exchange rate convergence improved.
The CBN calls 2026 a “realistic window of opportunity.” Growth is expected at 4.49%, driven by reforms, easing monetary policy, and investor confidence.
Oil output is projected at 1.50 million barrels per day, supported by better security and rising refining capacity. Non-oil growth should strengthen as reforms attract private investment.
Inflation is forecast to fall to 12.94%, aided by lower food prices, cheaper fuel, and stable exchange rates. The bank expects lower borrowing costs to boost growth.
Capital Market and Fiscal Picture
Nigeria’s capital market is set to remain bullish. The All-Share Index gained 42.82% in 2025, reflecting investor appetite.
Analysts highlight incentives such as zero capital gains tax for small businesses and exemptions for retail investors. Collaboration between the Nigerian Exchange and the Ministry of Industry could deepen participation.
Federal revenue is projected at ₦35.51 trillion in 2026, with expenditure at ₦47.64 trillion. The deficit is expected at ₦12.14 trillion, or 3.01% of GDP. Public debt may rise modestly to 34.68% of GDP.
Nigeria’s current account surplus is projected at $18.81 billion in 2026, supported by stronger exports and remittances.
Reserves are forecast to reach $51.04 billion, reinforcing exchange rate stability. Portfolio inflows and borrowings will keep the financial account in deficit, but attractive yields may sustain investor interest.
Economists say the outlook is achievable but warn of risks.
Johnson Chukwu of Cowry Asset Management said: “This is a welcome shift from crisis management to consolidation. But fiscal discipline is key.”
Bismarck Rewane of Financial Derivatives Company called the inflation target “ambitious but not impossible.” He noted that better FX liquidity and refining capacity could ease costs.
Ayo Teriba of Economic Associates added: “Stability is necessary, but not sufficient. Growth above 4% requires reforms translating into jobs and exports.”
Banking analysts flagged recapitalisation risks. “If capital raising crowds out other issuers or weakens asset quality, stability could be tested,” one Lagos analyst said.
Risks Ahead
The CBN admits risks remain. Fiscal slippages, global shocks, capital reversals, weather disruptions, and oil supply issues could derail projections. Rising non-performing loans may also strain banks.
Still, the bank vows to balance price stability with growth, attract investment, and consolidate FX stability. It plans to strengthen cybersecurity, enforce credit discipline, and deepen financial integration.
If reforms hold, 2026 could mark Nigeria’s shift from stabilisation to sustained growth.
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