The Central Bank of Nigeria (CBN) has projected a more stable and resilient Nigerian economy in 2026, underpinned by sustained structural reforms, improved fiscal discipline, easing inflationary pressures, and a more stable foreign exchange market.
According to the apex bank’s Macroeconomic Outlook for Nigeria, 2026, global economic growth is expected to moderate slightly, reflecting lingering trade tensions and subdued demand in major economies.
However, easing inflation, lower energy costs, and improving supply chains are expected to support financial conditions and investor confidence worldwide.
Against this backdrop, Nigeria’s economy is projected to continue on an expansionary path in 2026, with real GDP growth estimated at 4.49 per cent. This growth is expected to be driven largely by broad-based structural reforms, improving business conditions, and gradually easing monetary policy.
The CBN expects headline inflation to decelerate markedly in 2026, with the average rate projected at 12.94 per cent, supported by declining food prices, moderation in premium motor spirit (PMS) costs, exchange rate stability, and sustained coordination between fiscal and monetary authorities.
In 2025, inflation was estimated to have moderated following tight monetary conditions, exchange rate reforms, and policy alignment, setting the stage for further disinflation in the year ahead.
Nigeria’s external position is projected to remain strong in 2026, supported by robust export performance, steady diaspora remittances, increased oil and gas production, improved domestic refining capacity, and stronger global demand.
According to the report made available on Tuesday, the CBN projects the current account surplus to rise to US$18.81 billion, while increased portfolio inflows and external borrowing are expected to keep the financial account in a net borrowing position of US$10.15 billion. External reserves are forecast to increase further to US$51.04 billion, reinforcing confidence in the foreign exchange market.
“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 US$10.15 billion.
“The IIP is projected to record a net borrowing position of US$69.58 billion in 2026, as attractive yields are anticipated to further boost capital inflows. Reforms in the foreign exchange market are expected to sustain exchange rate stability, while external reserves is projected to increase to US$51.04 billion,” the bank noted.
Reforms in the foreign exchange framework are expected to sustain exchange rate stability, while attractive yields could boost capital inflows, with the international investment position projected to record a net borrowing position of US$69.58 billion.
The outlook indicates continued improvements in fiscal space, supported by non-oil revenue growth and the ongoing implementation of the Nigeria Tax Act, 2025. Federal Government revenue and expenditure are 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, up from 33.98 per cent in mid-2025, largely reflecting expected new borrowings. The CBN stressed the importance of aligning debt management strategies with fiscal rules to ensure long-term sustainability.
The banking sector is expected to remain stable in 2026, supported by regulatory oversight, macroprudential measures, and ongoing recapitalisation efforts. The capital market is projected to remain bullish, buoyed by rising investor confidence, improved macroeconomic fundamentals, and policy initiatives aimed at stimulating growth.
However, the CBN cautioned that prolonged banking sector recapitalisation could pose risks of investor fatigue and crowd out other financial sector priorities if not carefully managed.
Despite the generally optimistic outlook, the CBN identified several downside risks, including unexpected fiscal slippages, sudden reversals in global financial conditions, exchange rate volatility, unfavourable climatic conditions, disruptions to crude oil production, and heightened geopolitical tensions.
The apex bank also warned that a significant rise in non-performing loans could weaken asset quality and pose systemic risks to the financial system if left unchecked.
Looking ahead, the CBN reaffirmed its commitment to balancing price stability with output growth in 2026. Policy measures will focus on attracting foreign investment, consolidating exchange rate stability, strengthening cybersecurity frameworks, ensuring credit discipline, and deepening financial sector integration.
The bank also called for a broader tax base, more efficient and equitable taxation, and strict adherence to fiscal rules to support sustainable growth and macroeconomic stability.
“To boost fiscal operations, there is a need to broaden the tax net and establish a more efficient and equitable tax regime, through the effective implementation of the Nigeria Tax Act, 2025, among other short-term priorities. Also, the fiscal authority should ensure that the debt strategy remains
aligned with fiscal rules for debt sustainability,” the apex bank stated.
