Nigeria’s economy is projected to record stronger growth this year, with analysts forecasting real Gross Domestic Product expansion of about 4.4 per cent as the impact of ongoing reforms continues to shape economic performance.
According to BusinessDay, the growth projection is supported by assessments from the Central Bank of Nigeria, leading economists and reputable investment houses, which expect the 2026 economic outlook to reflect sustained gains from structural reforms, stronger private sector investment and improved macroeconomic stability.
President Bola Tinubu, in his New Year address, said Nigeria closed 2025 on a strong footing. He noted that despite policy measures aimed at curbing inflation, the country recorded robust GDP growth in every quarter, with annualised growth expected to exceed 4 percent.
According to the Central Bank of Nigeria’s 2026 Macroeconomic Outlook, the Nigerian economy is projected to expand by 4.49 percent in 2026, driven by the implementation of well-sequenced and consistent fiscal and monetary policies.
Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, expressed cautious optimism in his review of the 2025 economy and outlook for 2026. He projected GDP growth of between 4.0 and 4.5 percent, supported by moderating inflation and improved performance in the non-oil sector.
Yusuf said easing inflation could create room for gradual monetary easing, stimulate private investment and strengthen domestic demand across key sectors of the economy.
However, he warned that several downside risks remain, including insecurity, volatility in oil prices and production, high energy and logistics costs, and rising debt service obligations estimated at over N15 trillion in the 2026 budget. He also identified pre-election fiscal pressures, emerging resistance to tax reforms and external geopolitical headwinds as potential threats.
Yusuf added that sustaining reform momentum while addressing security and structural constraints would be critical to converting macroeconomic stability into inclusive economic growth.
Bismarck Rewane, Managing Director of Financial Derivatives Company, said Nigeria’s GDP growth is forecast to rise to 4.1 percent in 2026, driven by expanding business activity, infrastructure development, improved industrial policy execution, stronger private sector credit growth, better trade flows and higher domestic value addition.
Rewane noted that consumption, which has been severely eroded by inflation, is expected to recover gradually, while investment spending will be supported by increased government bond issuance and expanded public infrastructure projects.
He identified six sectors expected to shape Nigeria’s economic trajectory in 2026, led by agriculture and agro-processing with projected earnings of N104.6 trillion.
This is followed by real estate and construction with N72.41 trillion; telecommunications with N41.07 trillion; manufacturing with N38.25 trillion; the creative economy with N7.23 trillion; and technology and fintech with N2.97 trillion.
Rewane said each of these sectors is undergoing structural transformation driven by demographic pressure, digital expansion, urbanisation, regional trade integration and broader macroeconomic adjustment.
Baboye Olaolu, Lead Economist and Fixed Income Strategist at CardinalStone, said during an interview on Channels Television that Nigeria’s outlook from 2025 into 2026 resembles 2019, a period characterised by relative macroeconomic stability.
Olaolu projected nominal GDP of about N507 trillion, or roughly $362 billion, in 2026, supported by moderating inflation, improved foreign exchange stability and recovering business profitability. He expects inflation to decline below the long-run average of 14 percent, creating space for monetary policy easing.
He added that improved FX liquidity, rising foreign investor confidence and growing non-oil exports, particularly gas and refined petroleum products, would help sustain growth and support GDP expansion.
According to CardinalStone Research’s 2026 Macroeconomic Outlook, Nigeria’s real GDP is expected to rise to 4.4 percent in 2026, supported by a broad-based recovery across oil and gas, services, construction, agriculture and the digital economy.
The report said the projected acceleration represents a clear departure from the past decade, when real GDP growth averaged about 2 percent, reflecting the impact of macroeconomic reforms, improved external balances and easing inflationary pressures.
“After nearly a decade of real GDP growth averaging about 2.0 percent, growth is likely to find a new level of 4.4 percent in 2026 and over 4.5 percent–5.0 percent in the medium term,” CardinalStone Research noted.
The services sector is expected to remain Nigeria’s largest growth driver in 2026, reflecting the economy’s service-oriented structure.
According to CardinalStone, domestic trade, the largest component of the services sector, is projected to grow by 2.4 percent, marking its strongest performance since before the COVID-19 pandemic.
“Trade margins are likely to be firmer, as recovering local consumption, normalisation of energy and logistics costs are positive for trade volumes and inventory cycles,” the report stated.
Real estate, which accounts for nearly a quarter of the services sector, is forecast to grow by 4.7 percent in 2026, up from 3.9 percent in 2025, supported by urbanisation and increased infrastructure spending.
The report said the Renewed Hope Project and rising state-level investments in roads and airports are expected to boost output in the sector.
In the ICT sector, growth is projected at 6.6 percent, driven by higher capital expenditure by mobile network operators following recent tariff adjustments, alongside expanded 4G and 5G network rollouts.
CardinalStone said broader network coverage and technological advancement, particularly in key digital infrastructure such as data centres, would support growth, although it warned that the NIN-SIM linkage remains a major downside risk to the outlook.
Financial services are expected to record the strongest growth within the services sector, with expansion projected at 20.3 percent in 2026, up from 17.6 percent in 2025.
“This is expected to be driven by higher banking fees, stronger credit creation following a reduction in the monetary policy rate, and rising electronic banking fees due to aggressive digital investments by banks,” the report stated.
Nigeria’s oil and gas sector is projected to grow by 6.6 percent in 2026, slightly below the 7.1 percent expected in 2025, reflecting fading base effects.
However, CardinalStone forecasts average oil production to increase to 1.75 million barrels per day in 2026, compared with 1.67 million barrels per day in 2025.
The improvement is attributed to declining crude oil losses, which the report said are at their lowest level since 2009, as well as annual licensing rounds focused on underdeveloped and deepwater assets.
Investment momentum in the sector remains strong, supported by executive orders issued in 2024 and 2025, which the report said resulted in $16.0 billion in new investment commitments over the past two years.
Gas development is also gaining momentum, with CardinalStone highlighting an industry-wide push toward increased natural gas production, reduced gas flaring and expanded commercialisation. Companies such as Seplat are expanding into LPG and CNG projects to meet industrial and domestic demand.
The agricultural sector is projected to grow by 3.0 percent in 2026, slightly above the 2.8 percent recorded in 2025, supported by improved energy supply and greater foreign exchange stability.
A key development cited in the report is the reconstitution of the Agricultural Credit Guarantee Scheme Fund board by the Central Bank of Nigeria.
CardinalStone noted that while it remains unclear whether this signals a return to the CBN’s discontinued development finance role, the scheme is designed to de-risk agricultural lending and unlock additional credit for the sector.
The report added that agriculture has received only about 5.0 percent of total banking system credit over the past five years, highlighting the need for improved financing to boost productivity and output.
Manufacturing growth is forecast to reach 2.6 percent in 2026, up from an estimated 1.4 percent in 2025, supported by easing inflation, improved FX conditions and anticipated monetary policy easing.
CardinalStone observed that manufacturing has been slow to respond to reforms due to policy lags and elevated interest rates, with firms borrowing at close to or above 30 percent in 2025.
However, the report expects a 300 to 400 basis point reduction in the monetary policy rate to improve credit conditions. Additional support is expected from improved domestic refining capacity, particularly as the Dangote Refinery plans to scale output from 650,000 barrels per day to 700,000 barrels per day in 2026, with further expansion planned over the longer term.
