Nigeria’s central bank has outlined a cautiously optimistic outlook for 2026, projecting stronger economic growth alongside a sharp easing in inflation as reforms begin to gain traction. The forecast points to growth of 4.49 percent next year, supported by improved stability in foreign exchange markets and higher oil production. Policymakers see these trends as evidence that recent structural adjustments are starting to deliver results after a challenging period marked by high inflation and currency volatility. The outlook reflects expectations of broader based expansion beyond the oil sector, with non oil activity playing a larger role as financing conditions gradually improve. Officials believe a more stable exchange rate environment will help restore confidence, support investment, and reduce imported cost pressures that have weighed on households and businesses in recent years.
Inflation is expected to ease significantly in 2026, with the central bank forecasting an average rate of 12.94 percent, down sharply from levels seen in 2025. The projected slowdown is linked to easing food and fuel prices, improved supply conditions, and steadier foreign exchange dynamics. Inflation has already shown signs of cooling, having declined for several consecutive months toward the end of the year. The central bank kept its benchmark interest rate unchanged at a high level in its final policy meeting, signaling a preference to allow disinflation to take hold before pursuing broader easing. A reduction in the deposit rate was viewed by analysts as a signal of confidence in the direction of the economy, even as monetary policy remains tight to anchor expectations.
The outlook also highlights ongoing fiscal and external challenges, even as buffers are expected to strengthen. Oil remains central to projections, with prices assumed at moderate levels and output rising to around 1.50 million barrels per day. External reserves are forecast to increase, supported by stronger export earnings and remittance inflows, while the current account is expected to remain in surplus. Fiscal policy is projected to stay expansionary, with deficits funded largely through domestic borrowing. The reforms pursued by the administration of Bola Tinubu are seen as critical to sustaining momentum, particularly in oil, tax, and foreign exchange markets. Overall, the central bank’s outlook suggests a gradual but meaningful improvement in macroeconomic conditions.
