The Nigerian Economic Summit Group has projected that the nation's economy will expand by 5.5 per cent in the year 2026. This forecast, presented alongside an inflation target of 16 per cent and a rise in foreign reserves to $52 billion, comes with a stark warning against reversing critical policy reforms.
A Critical Window for Consolidation
Dr Olusegun Omisakin, the Chief Economist and Director of Research at NESG, unveiled these projections during the launch of the group's 2026 Macroeconomic Outlook. He described the current period as the "Consolidation Phase" of Nigeria's economic reform journey, situated between the stabilisation efforts of 2024-2025 and a hoped-for acceleration from 2030.
Omisakin issued a serious caution, stating that Nigeria faces a "critical 18-month window" following its stabilisation reforms. He pointed to experiences in countries like Ghana and Brazil, where initial economic gains were lost due to policy inconsistency and reform fatigue. "By 2027, if we are distracted by the gains we've seen now and we are not really going deep in terms of deepening our reforms and our institutions, the fear is we might not be able to achieve or go beyond what we have classified as consolidation rates," he explained.
This sentiment was echoed by NESG Chairman, Mr Olaniyi Yusuf, who noted that while stability is necessary for growth, it is not sufficient on its own. He highlighted that recent growth has been modest, uneven, and driven by a narrow set of sectors, with weak transmission to employment and household incomes.
Government Presents Slightly More Conservative View
The Minister of Finance and Coordinating Minister for the Economy, Mr Wale Edun, presented the government's own, slightly more conservative projections. He stated the economy is expected to grow by 4.68 per cent in 2026, with inflation averaging 16.5 per cent and the exchange rate settling at N1,400 to the dollar.
Edun emphasised that the success of the 2026 Budget of Consolidation would be measured by tangible improvements in the lives of Nigerians, such as better electricity supply and food availability, not just by economic metrics.
Both sets of projections acknowledge the painful structural reforms undertaken since mid-2023, including petrol subsidy removal and exchange rate unification, which initially sent inflation soaring above 33 per cent in 2024.
Structural Challenges and Fiscal Realities
Despite the positive headline projections, significant structural weaknesses persist. The manufacturing sector grew by only 1.5 per cent and agriculture by just 2 per cent in 2025—rates described by Omisakin as "risky signals" given their importance for job creation.
On the fiscal front, Minister Edun revealed that 2025 budget implementation faced significant revenue shortfalls, with both revenue and expenditure at only about 60 per cent of annual targets by the third quarter. The fiscal deficit stood at 3.4 per cent of GDP, slightly above the legal ceiling, while public debt rose to N152 trillion (over $100 billion).
For 2026, the government projects a budget deficit equivalent to 4 per cent of GDP. Edun stressed that reducing debt reliance would require boosting revenue through digitalised tax collection and enforcing new tax laws designed to broaden the base while protecting small businesses.
Inflation Rebasing Draws Expert Scrutiny
The economic discussion is happening against a backdrop of renewed scrutiny of Nigeria's inflation data. The headline inflation rate ticked up to 15.15 per cent in December 2025, ending eight consecutive months of decline, according to the National Bureau of Statistics.
However, this figure follows a controversial rebasing of the Consumer Price Index, which shifted the base year from 2009 to 2024. This technical move caused a sharp apparent drop in the inflation rate, a change many Nigerians find at odds with market realities.
Mr Yemi Kale, the Group Chief Economist at the African Export-Import Bank and former Statistician-General of Nigeria, has warned that the transition may have been "rushed" and could be fundamentally flawed. He criticised the NBS for declaring previous inflation figures non-comparable, which he argues undermines year-on-year analysis and masks the true cost-of-living crisis.
"Mistakes can be made and as long as you're ready to fix errors and listen to experts, that's what matters, not the defensive posture," Kale urged.
The Path Forward: Private Sector and Institutional Deepening
Both the NESG and the government underscored the indispensable role of the private sector in achieving consolidation, especially given constrained public resources. Edun called on Nigerians at home and abroad to invest in the domestic economy, noting that the removal of distortions had created a more level playing field.
Omisakin stressed that the private sector must also "hold them [the government] accountable for reforms." The NESG outlined four critical pillars for successful economic consolidation through 2029:
- Macroeconomic anchoring (single-digit inflation, >$50bn reserves).
- Structural transformation in manufacturing and agriculture.
- Institutional deepening through better policy coordination.
- Evolved social protection that enables productivity.
The summit also featured the soft launch of a new National Industrial Policy, signalling ongoing efforts to steer the economy towards its projected growth path amidst significant challenges and warnings.
