Nigeria’s 2026 outlook brightens, but oil, FX and policy shocks still pose risks —PwC
Nigeria’s Economic Outlook for 2026 Shows Promise Amid Key Risks
By Peter Egwuatu
LAGOS — Nigeria’s economic forecast for 2026 presents signs of stability and increased business confidence, yet experts from PricewaterhouseCooper (PwC) caution that these advancements remain precarious and vulnerable to fluctuations in the oil market, foreign exchange pressures, and policy-related shocks.
During a PwC and BusinessDay Executive Roundtable focused on Nigeria’s 2026 Budget and Economic Outlook, participants expressed cautious optimism, tempered by concerns regarding unresolved structural and geopolitical issues.
In his opening remarks, Sam Ado, Regional Senior Partner at PwC West Africa, described how global and Nigerian executives are operating with a dual focus. He referred to these perspectives as “two lenses”: a microscope that examines immediate threats, including geopolitical tensions and cybersecurity risks, and a telescope that highlights long-term opportunities driven by technology and innovation.
Applying this framework to Nigeria, Ado noted several macroeconomic improvements. He reported that inflation has decreased to 14.45%, relieving the country from previously high-inflation status. Additionally, the Naira has strengthened to approximately N1,436 per dollar, while foreign exchange reserves have surpassed $45 billion, providing a buffer against external shocks.
“These outcomes reflect disciplined monetary policy and a degree of stability that many thought impossible,” Ado stated. However, he emphasized that stability should not be mistaken for success, stressing, “Stability is not victory. It is only a platform on which sustainable growth must be built.”
According to PwC’s 29th Global CEO Survey focusing on Nigeria, 90% of Nigerian CEOs anticipate economic improvement in 2026, a significant rise from 64% last year. Furthermore, 56% express strong confidence in revenue growth, which surpasses the global average.
Ado highlighted persisting risks, particularly in fiscal matters, revealing that debt servicing is projected to consume approximately 45% of federal revenue, with a fiscal deficit estimated at N24 trillion. He identified four key priorities for Nigerian businesses moving forward: strategic reinvention, technological innovation, cybersecurity, and sustainability.
Frank Aigbogun, Publisher of BusinessDay, stressed the importance of business leadership in fostering long-term growth. He noted that Nigeria is currently only able to fund a fraction of its needed infrastructure and emphasized the need for enhanced tax compliance and civic engagement.
In a broader risk assessment, Olusegun Zaccheaus, PwC Partner and Chief Economist for the West African Market, pointed out that security challenges pose significant risks that may persist into 2026, particularly ahead of national elections. He highlighted that Nigeria faces transnational threats that extend beyond its borders.
On monetary policy, Zaccheaus expressed cautious optimism, indicating that relative stability is likely to continue. Despite easing inflation, he warned that interest rates are not expected to decline sharply due to liquidity concerns associated with the electoral cycle.
Zaccheaus also remarked on the lag in consumer recovery compared to overall economic growth, predicting that improvements in stability may take time to reflect in job creation and household income. He indicated that sector performance would likely vary, with services and oil and gas expected to outperform manufacturing and import-dependent sectors.
Zaccheaus further warned that Nigeria’s economic outlook remains susceptible to disruptions in oil production, foreign exchange instability, and geopolitical trade tensions, which could undermine budget assumptions.
Kenneth Erikume, PwC Partner and Tax Reporting & Strategy Leader, pointed out that Nigeria’s ongoing challenge of expenditures exceeding revenues remains unresolved. He noted that delays in capital expenditure releases in 2025 have weakened overall economic momentum.
With public debt estimated at N152 trillion, Erikume stated that borrowing will continue into 2026, emphasizing that enhancing revenue mobilization through tax administration efficiency and technological advancements is crucial for future fiscal sustainability.
