ED – this is bne IntelliNews's annual NIGERIA OUTLOOK 2026. We are making forward-looking assessments for major Global Emerging Markets in Emerging Europe, Asia, Latin America, Africa and the Middle East, drawing on insightful reporting from our bureaus around the world. What is on the agenda? What are the prospects for economic growth and what problems lie in store in the coming year? A detailed report that covers, business, economics, finance, energy, politics and the major sectors of the most important markets. Nigeria enters 2026 having completed the most far-reaching macroeconomic reset in decades. Fuel subsidies have been dismantled, foreign-exchange markets unified and central bank deficit monetisation halted, materially improving policy credibility and external resilience. Macro stability is strengthening and inflation is falling, but growth remains modest relative to Nigeria’s demographics and development needs, while poverty and insecurity continue to weigh heavily on social outcomes. The IMF’s 2025 Article IV projects real GDP growth of about 3.2%, with medium-term growth stabilising around 3.5% if reforms are sustained. This represents an improvement on the pre-reform slowdown, but remains insufficient to deliver meaningful income gains or absorb Nigeria’s fast-growing labour force. Upside risks depend on sustained oil-sector recovery, improved security and deeper structural reforms to unlock productivity. President Bola Tinubu’s administration has demonstrated strong reform resolve, pushing through politically costly measures early in the term. IMF staff assess these steps as having strengthened macro stability, reduced fiscal leakages and improved investor confidence. However, the short-term adjustment costs have been severe, and the benefits have yet to reach most households, contributing to eroding public trust and rising social pressures. Politically, Tinubu retains firm control of the federal executive and the ruling All Progressives Congress (APC), with cabinet cohesion intact. Nonetheless, inflation fatigue, fuel price volatility and FX-related cost pressures are expected to sharpen political tensions within the ruling coalition as state-level actors begin positioning ahead of the 2027 election cycle. Insecurity in the North-West and Middle Belt remains a key downside risk to both growth and political stability. Growth momentum improved to 3.4% in both 2024 and an estimated 2025, supported by recovering oil output and resilient services activity. Agriculture continues to underperform due to insecurity, climate stress and weak productivity. Q3 2025 GDP growth of 3.98% y/y underscores the increasing role of non-oil sectors, though gains remain uneven and concentrated in urban services. Disinflation has been more pronounced than expected. After averaging about 31% in 2024 on the rebased CPI, headline inflation fell to 23.7% y/y in April 2025 and declined further to 16.05% by October, according to National Bureau of Statistics data. The Central Bank of Nigeria has maintained a restrictive stance, keeping the policy rate around 27% to anchor expectations. Gradual easing is likely in 2026, but real rates are expected to remain positive for much of the year. Fiscal policy is shifting from crisis management towards consolidation. The medium-term fiscal framework approved in December envisages a 2026 federal budget of NGN54.5trillion ($37.7bn), revenue of NGN34.33trillion and a deficit of 3.61% of GDP, with debt-service costs of NGN15.9trillion. The strategy hinges on aggressive revenue mobilisation, subsidy savings and tighter expenditure control, though execution risks remain high. Public debt has risen rapidly, with debt-to-GDP estimated just above 50% in 2024, up from roughly 41–42% in 2023, reflecting naira depreciation and higher domestic borrowing. While still moderate by peer standards, debt affordability remains constrained by weak revenue. The 2024–27 Medium-Term Debt Management Strategy targets a 60:40 domestic-external mix, longer maturities and reduced refinancing risk. Social indicators remain fragile. The World Bank’s Macro Poverty Outlook projects national poverty edging higher through 2026, potentially exceeding 50% of the population, before only gradually easing. This highlights the urgency of scaling up well-targeted social protection, labour-intensive growth and security-linked agricultural recovery to prevent reform fatigue. Once viewed as a stabilising force between the wealthy and the poor, Nigeria’s middle class is shrinking amid persistent price pressures and rising living costs. The National Bureau of Statistics has classified 133mn people as multi-dimensionally poor. The banking sector enters 2026 liquid, profitable and well capitalised, with capital adequacy ratios above prudential minimums. However, asset-quality pressures are expected to rise as regulatory forbearance is unwound. External analysts anticipate non-performing loan ratios drifting towards 6–7%, particularly among SMEs and FX-exposed borrowers, testing banks’ risk management but not systemic stability. Energy remains both a stabilising anchor and a structural constraint. Oil output is recovering towards about 1.7mbpd in 2025–26, broadly aligned with OPEC quotas, aided by improved Niger Delta security. Power-sector reforms under the Power Sector Recovery Programme should gradually reduce fiscal risks, but grid fragility, tariff pressures and persistent outages will continue to weigh on manufacturing competitiveness and household welfare in 2026. Overall, Nigeria’s outlook for 2026 is one of improving macro stability but incomplete recovery. The reform foundation is stronger than at any point in recent years, yet translating stabilisation into inclusive, jobs-rich growth remains the central challenge.