Chief executives and top economists have warned that Nigeria’s economy in 2026 stands at a critical crossroads, with opportunities for higher growth tempered by immediate and real risks.
Speaking to our correspondent, business leaders, economists, and capital market operators emphasised that while reforms over the past few years have begun to stabilise macroeconomic indicators, challenges such as insecurity, volatile oil prices, pre-election fiscal pressures, and global shocks could easily undermine fragile gains, reports Vanguard.
“This is the year when reforms must leave policy documents and enter people’s lives,” said Mr. Wole Adeniyi, Managing Director and CEO of Stanbic IBTC Nigeria Limited. “Otherwise, public patience will wear thin, and the fragile recovery could stall before it gains momentum.”
CBN forecast
Recall that last week the Central Bank of Nigeria (CBN) released its outlook for the economy in 2026, including Gross Domestic Product, GDP growth of 4.49 per cent, a moderation in inflation to 12.4 per cent, and external reserves rising to $51.04 billion.
The CBN’s projections is based on assumptions which include crude oil averaging $55 per barrel in 2026, domestic crude production of 1.50 mbpd, the Naira averaging N1,400/$, PMS prices around N950/litre, and the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) maintained at 27 per cent and 45 per cent, respectively.
From Shock Therapy to Stabilisation
Nigeria’s journey to 2026 has been anything but smooth. In recent years, the economy endured high inflation, sharp exchange rate swings, fuel subsidy removal, aggressive monetary tightening, and tax reforms that, while necessary, imposed heavy short-term costs on households and businesses alike.
Yet, by late 2025, signs of macro-stability began to emerge: inflation eased from extreme highs, the Naira found relative stability, crude oil production improved, and foreign exchange reserves strengthened.
Mr. Oluropo Dada, President of the Chartered Institute of Stockbrokers (CIS), described this period as “a cautious but important turning point.”
“The domestic and global economic environments remain intricately linked. Movements in commodity prices, geopolitical alignments, and international capital flows continue to shape Nigeria’s macroeconomic fundamentals,” he said.
“Easing inflation in advanced economies and moderate global growth helped reduce market volatility in 2025, and Nigeria benefited from that. But persistent geopolitical tensions and continued monetary tightening abroad mean FX stability and inflation management will be absolutely critical in 2026.”
Former CIS President, Mr. Olatunde Amolegbe, also stressed that risks remain elevated.
“Even with a stable Naira, every $10 swing in oil prices has material implications for reserves and fiscal space,” he noted.
“Production stability, not just price, is essential. Without it, the government’s planning becomes guesswork.”
Growth: Modest, But Meaningful
At the centre of expectations for 2026 is economic growth. Estimates range from 3.1 per cent to 4.5 per cent-modest compared to other emerging markets, but significant given Nigeria’s recent turbulence.
Mr. Wole Adeniyi projects GDP growth of 3.5 per cent, framing Nigeria’s economy as “a reform story still unfolding.”
“2026 is critical because key reforms-the Tax Reform Act and banking sector recapitalisation-will move fully into implementation. These reforms are expected to underpin medium-term growth and strengthen investor confidence,” he said.
Meanwhile, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), is slightly more optimistic, projecting GDP growth of 4.0-4.5 per cent, provided reforms continue and security conditions improve.
“Nigeria is transitioning from stabilisation to growth,” Yusuf said.
“The foundation laid in 2025 gives reassurance, but sustaining reforms and addressing insecurity will determine whether this growth becomes durable and inclusive.”
For CEOs, growth is not just a number; it is a signal of real economic recovery. Stronger growth translates to higher sales volumes, improved cash flows, and renewed hiring-something businesses and households are keenly watching.
Inflation: The Make-or-Break Variable
Few issues dominate expectations for 2026 as much as inflation. After peaking above 33 per cent in 2024, headline inflation moderated significantly in 2025, aided by monetary policy tightening, exchange rate stability, and CPI rebasing.
Adeniyi forecasts average inflation of 17.4 per cent, ending the year around 16.5 per cent.
“Lower inflation gives the Central Bank room to cut interest rates. Stability in energy costs, a steadier exchange rate, and easing food prices will support this moderation,” he said.
Manufacturing executives welcome this development. Dr. Oluwasegun Osidipe, Director of Research at the Manufacturers Association of Nigeria (MAN), said:
“When inflation is trending downward and the exchange rate is stable, manufacturers can plan again.
Predictability matters more than perfect numbers. It allows us to invest, hire, and expand production.”
Yet the experts caution: energy shocks, insecurity, and FX volatility remain risks that could easily undo these gains.
Interest Rates and Credit Conditions
Closely tied to inflation is the outlook for interest rates. With price pressures easing, many expect monetary easing in 2026.
Adeniyi projects up to 300 basis points reduction in the Monetary Policy Rate (MPR) in the first nine months, with a pause in the final quarter.
“Lower rates will improve borrowing conditions, encourage private sector investment, and support household consumption,” he said.
Dr. Osidipe described the impact on manufacturers: “When loans that previously attracted over 30 per cent interest are now available at single-digit rates, manufacturers can produce more, employ more, and sell more. That directly feeds into GDP growth.”
However, analysts like Mr. David Adonri, Executive Chairman of Highcap Securities, urge caution. “Rate cuts must not outpace disinflation. Otherwise, inflation could rebound, and the FX market could destabilise,” he said.
Foreign Exchange: Stability Over Strength
CEOs and economists agree that a stable Naira matters more than a strong one.
Adeniyi expects the Naira to remain broadly stable in 2026, supported by improved FX inflows, higher reserves, and investor confidence in CBN reforms. “Offshore interest in Nigerian fixed-income instruments remains strong. Combined with oil receipts, this should keep FX relatively calm,” he said.
Dada emphasised the stakes, saying: “The goal is not perfection, but avoiding sharp volatility that scares investors. In 2026, even small swings could amplify insecurity and inflation risks.”
Oil: Still Central, but Diversification Rising
Oil remains central to Nigeria’s fiscal and external position. Production improved in 2025 to over 1.7 million barrels per day due to better security and upstream investments. For 2026, production is projected at 1.7-1.8 mbpd, while oil prices are expected to range $50-$65 per barrel.
Dada warned: “Every $10 change in oil prices affects reserves and budget planning. While manageable within $60-$80 per barrel, swings below $50 could be dangerous.”
Amolegbe added: “Stable output matters more than price alone. Predictable production ensures FX inflows, revenue planning, and macro stability.”
Non-Oil Sectors Take Centre Stage
Non-oil sectors-manufacturing, refining, agriculture, trade, and services-are expected to drive growth alongside oil.
Adeniyi highlighted the Dangote Refinery as a major catalyst: “The refinery could contribute about 1.5 percentage points to non-oil GDP growth through employment, infrastructure, and supply chain linkages.”
Manufacturing stakeholders are also optimistic. MAN projects 3.1 per cent real growth, with a 10.2 per cent contribution to GDP.
Dr. Osidipe said: “For years, manufacturers struggled under multiple taxation. The new tax law removes redundant levies, freeing liquidity for reinvestment.”
Government patronage is also key. He cited Cross River State, which is sourcing vehicles from local manufacturers: “When the government, the largest spender, scales up patronage, production and employment rise. That’s a tangible reform benefit.”
Fiscal Policy: Pressure and Promise
Fiscal policy will be tested in 2026. Stanbic IBTC projects a N20.5 trillion fiscal deficit, about 4.4 per cent of GDP, due to higher spending and pre-election commitments.
Adeniyi said: “The Tax Reform Act will broaden revenue, but immediate effects in 2026 are limited. Rebasing GDP provides some leeway, and if borrowing goes into productive infrastructure, it can enhance growth.”
Dr. Muda Yusuf highlighted the risks: “Insecurity, high debt servicing costs, and geopolitical tensions could undermine fiscal discipline. The government must act prudently to avoid destabilising the economy.”
Manufacturing Voices: Stability Breeds Confidence
Mr. George Onafowokan, MD of Coleman Technical Industries and MAN Ogun Chairman, described 2025 as a recovery year.
He said: “We are seeing stability in the Naira and downward inflation. This stability is critical for manufacturers.”
He added: “2026’s full potential depends on finalising pending fiscal policies, investing in infrastructure, and tackling insecurity. If done, Nigerians will truly feel the benefits of reform.”
Capital Markets and Investor Confidence
For capital markets, 2026 presents opportunities if macro stability holds.
David Adonri noted: “Global growth driven by AI, climate transition, and demographic shifts could create new investment flows. But FX instability and insecurity remain key risks. Fiscal policy, more than monetary policy, shapes long-term market fundamentals.”
Concerns over proposed Capital Gains Tax hikes also linger.
“Poorly calibrated tax policy could dampen investor appetite,” he warned.
Global Risks and Contingencies
Despite domestic improvements, Nigeria remains vulnerable to global shocks. Geopolitical tensions, trade disruptions, tariffs, and divergent central bank policies could affect oil prices, FX, and capital flows.
Adeniyi concluded: “Nigeria must remain resilient and consistent. External shocks are inevitable, but their impact can be managed with smart policy and careful fiscal planning.”
Living Standards and Inclusion
Beyond macro indicators, CEOs and economists stress inclusive growth.
Dr. Yusuf said: “If reforms continue and security improves, 2026 could mark the start of more inclusive growth, creating jobs and improving living standards.”
Engr. Leye Kupoluyi, President of the Lagos Chamber of Commerce and Industry (LCCI), added: “2025 stabilised the economy. The challenge for 2026 is ensuring businesses and households feel the benefits of reform.”
A Year That Must Deliver
For CEOs and top economists, 2026 is not expected to be miraculous-it is a proof year.
Adeniyi said: “Maintaining policy consistency, controlling inflation, supporting reforms, and ensuring FX stability is essential. If Nigeria gets this right, 2026 could mark the start of a more resilient, inclusive growth path.”
Dr. Yusuf summed it up: “Insecurity, debt service, oil swings, and global shocks remain threats. But with careful execution, 2026 could finally show Nigerians that reforms work.”
