The Central Bank of Nigeria (CBN) has projected a stronger macroeconomic outlook for 2026, forecasting faster economic growth, sharply lower inflation and sustained external sector stability, as structural reforms begin to yield measurable gains amid lingering global uncertainties.
In its Macroeconomic Outlook for Nigeria 2026, the apex bank noted that global growth slowed slightly to 3.20 per cent in 2025, down from 3.30 per cent in 2024, due to persistent trade tensions and weaker demand in advanced economies. Global inflation, however, moderated to 4.20 per cent, supported by easing energy prices and improved supply chains, which in turn helped relax financial conditions and bolster investor confidence.
Against this global backdrop, Nigeria’s economy recorded a stronger performance in 2025, with growth estimated at 3.89 per cent, compared with 3.38 per cent in 2024. The expansion was driven by improvements across both oil and non-oil sectors. Following the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), average inflation is estimated to have eased to 21.26 per cent in 2025, from 24.48 per cent in January, reflecting the impact of tight monetary policy, exchange rate stability and improved coordination between fiscal and monetary authorities.
Reacting to the outlook, Mr. Celestine Ukpong, an economist, described the 2026 projections as “a cautious but credible signal that macroeconomic reforms are beginning to gain traction.”
“The moderation in inflation and the projected growth of 4.49 per cent suggest that Nigeria is gradually exiting a period of macroeconomic stress,” Ukpong said. “However, the sustainability of this outlook will depend largely on fiscal discipline, revenue mobilisation and the ability to manage election-related spending pressures without reigniting inflation.”
In the financial sector, the CBN reported a slowdown in the expansion of monetary aggregates in 2025, reflecting higher interest rates and tight money market conditions. However, the Bank eased its policy stance in September 2025 to support domestic growth and investment. The banking system remained stable, with key financial soundness indicators within regulatory thresholds, supported by strong oversight and macro-prudential guidelines.
Peter Adebayo, FCA, noted that stability in the banking system is critical as Nigeria enters a sensitive phase of reform implementation.
“The resilience of the banking sector, especially ahead of recapitalisation, is reassuring,” Adebayo said. “But regulators must closely watch asset quality and concentration risks. A spike in non-performing loans or investor fatigue during recapitalisation could undermine confidence if not carefully managed.”
On the fiscal front, the CBN observed notable improvement in 2025, supported by policy and institutional reforms, stable crude oil prices and improved domestic production. Public debt stood at 33.98 per cent of GDP at end-June 2025, with domestic debt accounting for 52.86 per cent and external debt 47.14 per cent.
Nigeria’s external sector also posted positive results, with a balance of payments surplus of US$5.80 billion in 2025 and external reserves rising to US$45.01 billion, from US$40.19 billion in 2024. Exchange rate stability was supported by higher capital inflows, stronger export receipts and expanding domestic refining capacity.
Outlook for 2026: Optimism Tempered by Risks
Looking ahead, the CBN described 2026 as a “window of opportunity” for macroeconomic stabilisation. Economic growth is projected at 4.49 per cent, driven by continued structural reforms, a gradually easing monetary policy stance and increased investments in the oil and gas sector, supported by improved security and higher domestic refining capacity.
Headline inflation is projected to fall sharply to an average of 12.94 per cent in 2026, largely due to declining food prices and lower premium motor spirit (PMS) costs.
Ukpong cautioned, however, that the disinflation path remains fragile.
“Inflation could easily resurface if fiscal spending overshoots benchmarks or if global financial conditions tighten suddenly,” he warned. “The challenge for policymakers is to lock in these gains without choking growth.”
The capital market is expected to remain bullish in 2026, buoyed by the banking sector recapitalisation programme, rising investor confidence and supportive policy measures. Growth in monetary aggregates is expected to be influenced by exchange rate movements, fiscal operations, election-related spending and the continued enforcement of prudential measures.
The fiscal outlook for 2026 is optimistic, with the Federal Government’s retained revenue and expenditure projected at ₦35.51 trillion and ₦47.64 trillion, respectively, resulting in a provisional deficit of ₦12.14 trillion, equivalent to 3.01 per cent of GDP. Public debt is projected to rise modestly to 34.68 per cent of GDP by end-2026.
Adebayo stressed the importance of aligning borrowing with clear productivity outcomes.
“Debt sustainability is not just about ratios; it is about what the borrowed funds are used for,” he said. “Effective implementation of the Nigeria Tax Act, 2025, and stronger non-oil revenue mobilisation will be critical to reducing deficit pressures over time.”
On the external front, the current account surplus is projected to rise to US$18.81 billion in 2026, supported by strong exports, steady remittance inflows and higher oil and gas output. External reserves are projected to increase further to US$51.04 billion, while reforms in the foreign exchange market are expected to sustain relative exchange rate stability.
Despite the optimistic outlook, the CBN warned that risks remain, including climate-related disruptions, geopolitical tensions, renewed protectionist trade policies and potential stress in the banking sector from rising non-performing loans.
In response, the Bank reaffirmed its commitment to balancing price stability with output growth in 2026, deploying policy tools to attract foreign investment, stabilise the foreign exchange market, deepen the Global Standing Instruction (GSI) framework, strengthen credit discipline and enhance cybersecurity across financial institutions.
CBN projects 4.49% economic growth and lower inflation in 2026 as reforms deepen. Experts Celestine Ukpong and Peter Adebayo assess risks, fiscal discipline and banking sector stability.
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