Nigeria’s economy is on track to accelerate in 2026, driven by falling inflation, higher oil output, and deepening reforms, the central bank said.
According to the Central Bank of Nigeria’s (CBN) latest Macroeconomic Outlook, Nigeria’s gross domestic product is projected to expand by 4.49% next year, up from an estimated 3.89% in 2025.
The improvement reflects gains across both the oil and non-oil sectors, sustained macroeconomic stability, and the cumulative impact of reforms launched since 2023.
“The domestic economy is projected to expand by 4.49% in 2026, from an estimated 3.89% in 2025,” the CBN said, adding that the outlook is supported by “continued expansion in key non-oil sectors, improved crude oil production, and sustained stability in the macroeconomic environment.”
Growth has steadily climbed since 2024, when GDP rose by 3.38%. In 2025, expansion accelerated, with quarterly growth rates of 3.13% (Q1), 4.23% (Q2), and 3.98% (Q3).
The oil sector led the charge, growing by 9.39% amid enhanced security around installations and increased investment. Crude output rose to an average of 1.67 million barrels per day in 2025, up from 1.56 million the previous year.
Reforms and digital shift power non-oil growth
The non-oil sector, which accounts for the bulk of Nigeria’s economy, expanded by 3.70% in 2025. Services – including trade, real estate, information and communications, and finance – were the main drivers, buoyed by structural reforms, rising digital adoption, and improved business sentiment.
“Inflation, though still elevated, is projected to moderate further to 12.94% in 2026,” the CBN noted, citing “easing food and energy prices, as well as the lagged effects of the Bank’s monetary policy tightening cycle.”
Headline inflation averaged an estimated 21.26% in 2025 – down sharply from peaks above 24% earlier in the year – thanks to tight monetary policy, better fiscal coordination, exchange-rate stability, and base effects from prior price surges.
Food and fuel prices are expected to drive further disinflation. Improved security in Nigeria’s northern and Middle Belt farming regions, stronger harvests and targeted agricultural programmes should lower food costs. Meanwhile, increasing competition among domestic fuel refiners is projected to reduce petrol prices throughout 2026.
Monetary policy, which saw interest rates peak at 27.5% in mid-2024 to combat inflation, began easing in September 2025 as disinflation took hold. The CBN signalled that the trend would allow a “gradual transition to a full-fledged inflation-targeting framework.”
“The expected continuation of the disinflationary trend will provide a firm basis for the Bank’s gradual transition to a full-fledged inflation-targeting framework,” the central bank said. “Likewise, the exchange rate is projected to remain broadly stable, supported by rising diaspora remittances, higher oil receipts, and strong investor confidence.”
