Abuja, Dec 30 – Nigeria’s central bank projects economic growth of 4.49% in 2026, with average inflation expected to ease to 12.94%, according to its latest economic outlook released on Tuesday.
The forecast reflects cautious optimism following two years of sweeping reforms under President Bola Tinubu’s administration. The bank cited progress in oil sector reforms, foreign exchange market liberalisation, and tax policy changes as key drivers expected to support sustained growth and disinflation.
“The growth prospect in 2026 is positive on account of continued gains from broad-based structural reforms and improved stability in the exchange rate,” the central bank said in the report. It added that an eventual easing of monetary policy would further support growth by lowering borrowing costs.
The central bank kept its benchmark interest rate unchanged at 27% at its final policy meeting of the year in November, opting to allow inflation to cool further. However, it trimmed the deposit rate, a move widely interpreted as a signal of confidence in the improving macroeconomic outlook. Economists had expected a 100 basis-point cut following September’s first rate reduction since 2020.
Headline inflation, which averaged about 21.26% in 2025, is projected to fall sharply next year as easing food and fuel prices, alongside greater foreign exchange stability, help rein in cost pressures. Inflation slowed for an eighth consecutive month in November, dropping to 14.45%.
The outlook assumes an average oil price of $55 per barrel, oil production of around 1.50 million barrels per day, and an official exchange rate near 1,400 naira to the dollar. Oil remains Nigeria’s most important export and a key source of foreign exchange earnings.
Fiscal policy is expected to remain expansionary, with the central bank projecting a budget deficit of 12.14 trillion naira, equivalent to 3.01% of GDP, financed largely through domestic borrowing.
On the external front, Nigeria’s foreign exchange reserves are forecast to rise to $51.04 billion in 2026, while the current account surplus is expected to reach $18.81 billion. The bank said stronger oil and non-oil exports, along with resilient remittance inflows, would underpin the improvement in external buffers.
