Economy at Crossroads in 2026 as CEOs, Economists Flag Key Risks and Opportunities

Industry leaders and leading economists have warned that Nigeria’s economy in 2026 will face decisive tests, with prospects for stronger growth balanced by serious domestic and global risks.

Speaking to Financial Vanguard, chief executives, economists and capital market operators said recent reforms have helped stabilise key macroeconomic indicators, but warned that insecurity, oil price volatility, pre-election fiscal pressures and external shocks could still derail fragile gains.

“This is the year when reforms must leave policy documents and enter people’s lives,” said 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 outlook and assumptions

Last week, the Central Bank of Nigeria (CBN) projected GDP growth of 4.49 per cent in 2026, with inflation moderating to 12.4 per cent and external reserves rising to $51.04 billion.

The outlook assumes crude oil prices averaging $55 per barrel, production of 1.50 million barrels per day, an exchange rate of about N1,400/$, petrol prices around N950 per litre, and the Monetary Policy Rate (MPR) and Cash Reserve Ratio (CRR) remaining at 27 per cent and 45 per cent, respectively.

From shock therapy to cautious stability

Nigeria’s path to 2026 has been turbulent, marked by high inflation, sharp exchange-rate swings, fuel subsidy removal, tight monetary policy and sweeping tax reforms that imposed short-term pain on households and businesses.

By late 2025, however, signs of stability emerged, including easing inflation, relative naira stability, improved oil production and stronger reserves.

Describing the period as “a cautious but important turning point,” President of the Chartered Institute of Stockbrokers (CIS), Oluropo Dada, said global and domestic conditions remain tightly linked.

“Persistent geopolitical tensions and continued monetary tightening abroad mean FX stability and inflation management will be absolutely critical in 2026,” he said.

Former CIS President, Olatunde Amolegbe, added: “Even with a stable naira, every $10 swing in oil prices has material implications for reserves and fiscal space. Production stability, not just price, is essential.”

Growth expectations: modest but significant

GDP growth forecasts for 2026 range between 3.1 per cent and 4.5 per cent. Adeniyi expects about 3.5 per cent growth, driven by full implementation of tax reforms and banking sector recapitalisation.

“2026 is critical because key reforms will move fully into implementation, underpinning medium-term growth and investor confidence,” he said.

CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, projected 4.0–4.5 per cent growth if reforms persist and security improves.

“Nigeria is transitioning from stabilisation to growth,” Yusuf said. “But sustaining reforms and addressing insecurity will determine whether growth becomes durable and inclusive.”

Inflation and interest rates under scrutiny

Inflation remains a major concern. After peaking above 33 per cent in 2024, it eased in 2025 due to tighter monetary policy, FX stability and CPI rebasing.

Adeniyi forecasts average inflation of 17.4 per cent in 2026, ending the year around 16.5 per cent.
“Lower inflation gives the CBN room to cut interest rates,” he said.

Manufacturers see predictability as crucial. Director of Research at the Manufacturers Association of Nigeria (MAN), Dr. Oluwasegun Osidipe, said:
“When inflation is trending downward and the exchange rate is stable, manufacturers can plan again.”

With easing inflation, analysts expect some monetary easing. Adeniyi projected up to 300 basis points cut in the MPR in the first nine months of 2026, though others cautioned against premature easing.

“Rate cuts must not outpace disinflation,” warned Highcap Securities Executive Chairman, David Adonri.

FX stability over strength

Economists agreed that stability, rather than a stronger naira, should be the priority. Improved FX inflows, higher reserves and investor confidence are expected to support relative calm in the foreign exchange market.

“The goal is not perfection, but avoiding sharp volatility that scares investors,” Dada said.

Oil still key, non-oil sectors rising

Oil remains central to fiscal and external balances, with production projected at 1.7–1.8 million barrels per day and prices between $50 and $65 per barrel.

At the same time, non-oil sectors such as manufacturing, refining, agriculture and services are expected to drive growth. Adeniyi cited the Dangote Refinery as a potential catalyst for non-oil GDP growth.

Fiscal pressures ahead

Fiscal policy will also be tested, with Stanbic IBTC projecting a N20.5 trillion deficit, about 4.4 per cent of GDP, due to higher spending and pre-election pressures.

While the Tax Reform Act is expected to broaden revenue, experts say its immediate impact in 2026 may be limited.

A proof year for reforms

Beyond headline numbers, economists stressed inclusive growth and improved living standards.

“If reforms continue and security improves, 2026 could mark the start of more inclusive growth,” Yusuf said.

Summing up, Adeniyi noted: “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 and inclusive growth path.”

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