Global economic growth, estimated at 3.20% in 2025, was slightly below 3.30% in 2024. This was because of lingering trade tensions and weaker demand in major economies.
Global inflation moderated to 4.20% due to lower energy costs and continued normalisation of supply chains.
Financial conditions eased in many economies as inflation moderated, monetary policies became less restrictive, investor confidence rose, and trade tensions de-escalated.
The Nigerian economy’s performance remained strong in 2025, with growth estimated at 3.89%, up from 3.38% in 2024. The performance was supported by improvement in both the oil and non-oil sectors.
Following the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), consumer price inflation, which was 24.48% in January 2025, ended with an estimated average of 21.26% in 2025, shaped by a tight monetary policy stance, exchange rate stability, and improved monetary and fiscal policy coordination.
The year 2026 presents a realistic window of opportunity for macroeconomic stabilisation. The Nigerian economy is expected to continue expanding, with growth projected at 4.49% in 2026.
The projection is hinged on continued gains from broad-based structural reforms and a gradually easing monetary policy stance.
These are expected to further improve the business environment, enhance investor confidence, and support private-sector-led growth.
The growth momentum is also anticipated to be complemented by increased production and investments in the oil sector, supported by improved security surveillance, alongside gains from enhanced domestic refining capacity.
The headline inflation is projected to moderate to an estimated average of 12.94% in 2026, driven by declining food and premium motor spirit (PMS) prices.
Growth in monetary aggregates in 2026 is expected to be influenced majorly by exchange rate movement, fiscal operations, the impact of election-related spending, and continued implementation of prudential measures.
The Nigerian capital market is expected to remain bullish in 2026, supported by the bank recapitalisation exercise, rising investor confidence, and other policy measures aimed at fostering growth.
The fiscal outlook for 2026 is optimistic, driven by sustained non-oil revenue collection and continued implementation of the Nigeria Tax Act, 2025, alongside other policy reforms.
The FGN retained revenue and expenditure are projected at ₦35.51 trillion and ₦47.64 trillion, respectively, resulting in a provisional deficit of ₦12.14 trillion (3.01% of GDP). Public debt as a percentage of GDP is projected at 34.68% by the end of 2026, compared with 33.98% as of June 2025, predicated on expected new borrowings.
The positive trend in the external position is expected to be sustained in 2026, supported by strong exports, steady remittances inflow, increased oil & gas output, improved domestic refining capacity, and rising global demand from key trading partners.
The current account surplus is expected to rise to US$18.81 billion, while increased portfolio investment inflows and external borrowings are projected to keep the financial account in a net borrowing position of $10.15 billion.
In 2026, policy makers and financial analysts will focus on policy implementation (tax reforms, energy), inflation & monetary discipline, security (especially food-related), tech/fintech growth, banking sector stability (recapitalisation, NPLs), and pre-election fiscal pressures, all within a dynamic global trade environment influencing commodities and critical minerals.
Key signals include the impact of the new tax act, inflation trends vs. MPR cuts, digital economy expansion, and how well reforms address power/security to unlock growth, with agility and risk management crucial for investors navigating uncertainty.
Summary – Key Areas to Watch
Fiscal & Monetary Policy:
Tax Reforms: Impact of the new tax act on revenue and disposable income.
Inflation & Interest Rates: The Apex Bank’s ability to curb inflation (targeting <13%) and cut rates amid potential election spending. The CBN average headline inflation rate estimates for the year 2026 is 12.94%.
Government Spending: Monitoring pre-election expenditure and its effect on inflation.
Sectoral Performance:
Agriculture: Focus on value chains, food security, and agro-processing. Analysts forecast that optimally exploring the Nigerian agricultural production’s competitive advantage will enhance the growth of the agro sector rather than the short-term ongoing plan of food importation.
The sector remains the leading Nigerian economic sub-sector, and more attention should be paid to the agro sector to attain food sufficiency.
Technology: Growth in fintech, digital services, and AI adoption.
Energy: Renewables, mini-grids, and reliable distribution.
Financial Sector Stability:
Bank Recapitalisation: Completion of CBN’s ongoing Bank recapitalization directives. The CBN in November stated that 16 Banks have fully complied with the Bank recapitalisation directives.
Non-Performing Loans (NPLs): Managing potential increases with economic growth.
Cybersecurity: Increasing threats and digital security investments.
Insecurity & Structural Reforms:
Security: Worsening insecurity remains a major risk, impacting investment.
Bureaucracy: Efforts to unlock the informal sector and strengthen export competitiveness.
External Environment:
Global Commodities: Impact of oil prices and geopolitical shifts on trade.
Supply Chains: Global competition for critical minerals.
Investor Focus:
Agility & Risk Intelligence: Navigating policy inconsistencies and regulatory surprises.
Digital Transformation: Embracing AI and digital commerce.
Strategic Investments: In sectors like tech, power, and agriculture, 2026 is seen as a pivotal year for Nigeria’s ongoing economic reforms, depending heavily on sound policy execution and effective risk mitigation against structural challenges and pre-election pressures, as highlighted by Rewane Bismarck and FSDH Merchant Bank Limited.
