As Nigeria ushers in 2026, the country appears to be finding firmer footing in its economy, buoyed by a rebound in non-oil sectors and easing inflation.
Beneath the surface, a report by CSL Stockbrokers Limited fears that deep-seated insecurity, social pressures, and global uncertainties loom large, threatening to complicate the journey ahead.
In the report, CSL Research 2026 Outlook – Sustaining Reform Momentum Amid Social Strain and Political Transition, released on Monday, the research firm highlights the domestic and international forces set to shape the nation’s economic path this year.
Domestic Macroeconomic Factors
- Economic growth
The country’s GDP is projected to expand by around 4.2 per cent, largely supported by the non-oil sectors, including services, ICT, trade, and agriculture.
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Growth in the oil sector is expected at 4.1 per cent year-on-year, a slowdown from the 7.8 per cent projected for 2025, reflecting limited new projects and OPEC production caps.
- Inflationary moderation
Headline inflation is forecast to continue its downward trend, averaging 17–18 per cent. The moderation is expected to benefit from exchange rate stability, easing food prices, and increased domestic refining capacity from facilities such as the Dangote Refinery.
- Monetary and fiscal policy
The Central Bank of Nigeria (CBN) is expected to adopt a measured easing cycle, potentially lowering interest rates by up to 300 basis points to around 24 per cent by year-end.
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Meanwhile, the fiscal deficit is projected to remain elevated at 3.9–4.3 per cent of GDP due to high debt-servicing costs and election-related expenditures.
- Exchange rate stability
The Naira is projected to stay relatively stable at approximately ₦1,475 to the US dollar, underpinned by healthy foreign reserves exceeding $40 billion and improved market confidence.
Global uncertainties
- Global growth slowdown
Worldwide output growth is expected to moderate slightly to 3.1 per cent, reflecting elevated policy uncertainty and geopolitical risks that could constrain investment and consumer spending.
- Softening oil prices
Brent crude is projected to average around US$58 per barrel in 2026, posing downside risks to Nigeria’s oil revenues and current account surplus.
- International spillovers
The US economy remains a key driver of global demand and capital flows. While the IMF projects 2.1 per cent growth in the US, a sharper slowdown could negatively affect global risk assets and demand for Nigerian exports.
Socio-political risks and uncertainties
- Persistent insecurity
Ongoing banditry, kidnappings, and insurgency continue to disrupt agricultural production and investor confidence, particularly in the North-West, Middle Belt, and North-East, creating a “silent crisis” that undermines stability.
- Social fragility
Despite macroeconomic gains, approximately 139 million Nigerians live below the poverty line, and over 30 million face acute food insecurity. New tax reforms and fuel levies could further strain household incomes and heighten social unrest.
- Political transition
With the 2027 general elections approaching, political considerations are likely to slow reform momentum as the government focuses on preserving political capital. The rise of the African Democratic Congress (ADC) as a potential opposition force adds further uncertainty to the political landscape.
Stressing that Nigeria’s 2026 economy shows signs of stabilisation, with non-oil growth and moderating inflation providing a positive backdrop, the research firm urged that the nation must navigate ongoing security threats, fiscal pressures, and global market uncertainties—much like a ship finding calmer waters but still steering through hidden reefs.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
