Nigeria, one of Africa’s largest economies, continues to navigate a complex landscape defined by both persistent challenges and emerging opportunities. As the nation grapples with inflation, insecurity, and a fluctuating currency, a closer examination reveals a resilient economy showing signs of potential growth; BENJAMIN UMUTEME writes.
Nigeria’s economy, in 2026, presents a story of cautious optimism. Bold reforms initiated under President Bola Tinubu since 2023 – fuel subsidy removal, foreign exchange unification, tax reforms, and tighter monetary policy – have begun yielding measurable stabilisation after significant short-term pain.
While inflation remains elevated, poverty affects a large share of the population, and structural issues like insecurity and infrastructure deficits persist, key indicators show progress: moderating inflation, services-led GDP growth, rising non-oil exports, improved foreign reserves, and a buoyant equities market.
International institutions and local analysts forecast GDP growth around 4.1-4.4% for 2026, outpacing much of the global average in a challenging environment.
Macroeconomic stability and growth trajectory
The narrative of the Nigerian economy in 2026 is anchored in the progress made towards stabilising macroeconomic indicators. After the volatility experienced in previous years, 2025 served as a foundational year for reform execution, leading to improved foreign exchange (FX) liquidity and a more disciplined monetary policy stance by the Central Bank of Nigeria.
This stabilisation has been reflected in key performance indicators. Real GDP growth for 2026 is projected to expand to approximately 4.3%, supported by a combination of higher crude oil production and a resilient services sector.
“Nigeria enters 2026 with a cautiously optimistic macroeconomic and capital market outlook,” noted a recent industry review, emphasising that the economy is consolidating the gains from 2025 through improved fiscal prudence and more consistent policy frameworks.
The financial system also displays renewed strength, supported by robust prudential ratios. Capital adequacy, liquidity, and non-performing loan (NPL) ratios have remained within prudent limits, reflecting effective regulatory oversight.
Experts pointed out that this stability is crucial, as it creates the necessary environment for businesses to transition from defensive, short-term survival tactics to more strategic, medium-term investment planning.
Data analysis
Data show that in April 2025, the naira-to-dollar exchange rate fluctuated, with the official CBN rate, hovering around ₦1,531-₦1,612, while the parallel market exceeded ₦1,600 by month-end.
The dollar remained relatively stable but slightly volatile, closing April at approximately ₦1,599.70 – ₦1,610.
Whereas in April 2026, the naira to US dollar exchange rate primarily fluctuated between ₦1,348 and ₦1,380 in the official Nigerian Foreign Exchange Market (NFEM). By late April, specifically April 27, 2026, the rate was approximately ₦1,352.25 per USD, following a period of moderate volatility and reported relative stability in the official market.
But in April 2025, Dangote Cement prices in Nigeria ranged between ₦9,700 and ₦10,500 per 50kg bag, while it increased to between ₦11,500 and ₦12,500 in April 2026.
Stabilisation after painful reform
The reforms of 2023 – 2025 were painful but necessary to address long-standing distortions. Fuel subsidy removal and naira floatation initially spiked inflation to peaks near 34% in late 2024, exacerbating the cost-of-living crisis.
By early 2026, however, headline inflation had eased sharply to around 15.06% in February (rising modestly to 15.38% in March amid external pressures from Middle East tensions), according to NBS data.
The CBN projects further moderation to about 12.94% for 2026, aided by tighter monetary policy, exchange rate stability, and improved supply chains.
The CBN governor, Olayemi Cardoso, has highlighted these gains: “Reforms are delivering results: lower inflation, stable FX markets, and stronger monetary policy are helping to build a solid foundation for long-term growth.”
The CBN maintained a restrictive stance, with the monetary policy rate around 27% before cautious easing, helping anchor expectations while foreign reserves climbed to multi-year highs near $40 – 45 billion.
Exchange rate unification reduced multiple windows and arbitrage, contributing to greater FX stability. Non-oil revenues rose significantly through improved tax administration and customs enforcement, with FAAC (Federation Account Allocation Committee) revenues increasing as a share of GDP. Public debt remains relatively manageable at around 40% of GDP, though debt service pressures persist.
Sectors driving the positive narrative
While oil production remains a significant driver of export revenue, the broader economy is increasingly characterised by the resilience of non-oil sectors. The services sector, in particular, has demonstrated a capacity to withstand macroeconomic pressures, providing a crucial buffer against global price shocks.
Furthermore, the capital market has shown renewed vitality. Landmark listings and the completion of bank recapitalisation efforts are expected to deepen market participation and enhance liquidity.
As observed by some market analysts, the robust performance of the stock market could reflect underlying resilience and potential in specific sectors, particularly those less affected by the country’s macroeconomic vulnerabilities.
This activity is a testament to the country’s enduring economic potential and its strategic importance within the African continent.
Growth drivers
Services have anchored recent expansion, contributing over 55–57% to GDP in recent quarters. Finance, ICT, telecommunications, and real estate led Q3 2025 growth. The digital economy and fintech continue to thrive, with electronic payment transactions surging and platforms supporting small businesses. Non-oil exports reached a record $6.1 billion in 2025, up 11.5% year-on-year, reflecting diversification momentum.
Oil production has recovered modestly, averaging around 1.5 -1.7 million barrels per day (mbpd) with peaks higher, bolstered by efforts against theft and the Dangote Refinery’s ramp-up.
This supports exports and reduces import dependence on refined products. Mining and quarrying show potential from energy (transition minerals), while agriculture – despite constraints – offers upside with better logistics and security improvements in some areas.
Remittances provide another buffer, with strong inflows supporting household consumption and FX supply. The equities market has been a bright spot: the Nigerian exchange (NGX) all-share index posted strong gains, rising over 100% in some yearly comparisons, with market capitalisation crossing significant thresholds and turnover hitting records in 2025. This reflects improved investor confidence amid policy clarity.
PwC’s Nigeria Economic Outlook noted that, “services-led growth may continue to anchor GDP expansion,” while projecting 4.3% growth in 2026, though warning of concentration risks. Mastercard Economics Institute projected 4.0% GDP growth, attributing it to “fiscal reforms and investments unlocking new consumption and business activity.”
Experts’ view
Economists and institutional leaders offer balanced, yet encouraging views. World Bank officials have described the economy as “resilient” with growth set for 2026, urging authorities to save oil windfalls, maintain tight policy, and avoid blanket subsidies.
The Managing Director of Financial Derivatives, Bismarck Rewane, sees a potential “historic economic reset” in 2026, citing easing inflation, GDP momentum, and market improvements as signs of real recovery.
Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE) pointed to exchange rate stability and slowing inflation as key wins from 2025.
While the Chief Economist at the Development Bank of Nigeria, Joseph Nnanna, highlighted multiple sectors poised for expansion, including services such as digital ICT, agriculture, and manufacturing. IMF assessments acknowledge sustained momentum from improved macroeconomic stability and positive terms-of-trade effects, despite global headwinds.
A think tank, the Independent Media and Policy Initiative (IMPI), states that reform policies of the Tinubu administration have engendered high revenue earnings in the real sector of the economy.
In a policy brief by its Chairman, Dr. Omoniyi Akinsiju, IMPI argued that the companies involved in the productive sector have adjusted to the new policy environment with higher annual returns.
According to IMPI, “This speaks to the resurgence of revenue and profitability in privately managed companies, with far-reaching implications for Domestic Product (GDP), employment, poverty reduction, and wealth creation, leading to a state of general prosperity from now on.
“Top performers on the list of high-revenue-generating companies include Guinness Nigeria Plc, which reported a profit after tax of N41 billion in its audited 18-month results, ending on December 31, 2025, marking its first return to profitability since 2023.”
Strategic imperatives for 2026
To achieve sustainable and inclusive growth, the consensus among experts is that Nigeria must maintain policy consistency and intensify the execution of structural reforms.
The 2026 federal budget, themed “Budget of Consolidation, Renewed Resilience and Shared Prosperity,” explicitly prioritises security, signaling a government effort to address the primary barriers to economic advancement.
Business leaders are therefore urged to adopt greater strategic agility. PwC Nigeria highlights several practical imperatives for the current year, including making selective investment bets in high-potential sectors, scenario-planning for macroeconomic shocks, and accelerating digital transformation.
As Rewane and other market observers suggested, the year will demand a careful balance between leveraging new opportunities – such as advancements in digital finance and AI – and proactively managing the persistent risks inherent in the landscape.
Ultimately, Nigeria’s economic journey in 2026 is defined by a transition from crisis management to consolidation. While the road ahead remains fraught with obstacles, the combination of improved regulatory discipline and the underlying strength of the domestic market provide a pathway for the country to capitalise on its vast potential, provided that the current momentum in reform is sustained and effectively executed.
