– As CBN projects sharp inflation decline in 2026
Mkpoikana Udoma
Port Harcourt — Nigeria’s economy outperformed global growth trends in 2025 and is projected to accelerate further in 2026, with inflation expected to drop sharply, according to the latest macroeconomic outlook released by the Central Bank of Nigeria, CBN.
While global economic growth slowed slightly to 3.20 per cent in 2025, down from 3.30 per cent in 2024 due to trade tensions and weak demand in major economies, Nigeria’s economy expanded by an estimated 3.89 per cent, improving on 3.38 per cent recorded in 2024.
The stronger domestic performance was driven by gains in both the oil and non-oil sectors, amid improved crude oil production, rising domestic refining capacity and continued structural reforms.
Global inflation eased to 4.20 per cent in 2025, supported by lower energy prices and normalising supply chains. In Nigeria, inflationary pressures moderated following the rebasing of the Consumer Price Index by the National Bureau of Statistics, NBS.
Headline inflation, which stood at 24.48 per cent in January 2025, averaged an estimated 21.26 per cent for the year, shaped by tight monetary policy, improved exchange rate stability and better fiscal-monetary coordination.
The CBN noted that financial conditions eased in many economies as inflation slowed and monetary policies became less restrictive.
In Nigeria, expansion in monetary aggregates decelerated as interest rates remained elevated for much of the year, although the Bank eased its policy stance in September 2025 to support growth and investment.
“The banking system remained stable, with key financial soundness indicators broadly aligned with regulatory benchmarks,” the report stated, attributing resilience to effective oversight and macro-prudential measures.
Nigeria’s fiscal position also improved in 2025, supported by reforms, stable crude oil prices and domestic output.
Total public debt stood at 33.98 per cent of GDP as at end-June 2025, with domestic debt accounting for 52.86 per cent and external debt 47.14 per cent.
On the external front, Nigeria recorded an estimated balance of payments surplus of $5.80 billion in 2025, while external reserves rose to $45.01 billion, up from $40.19 billion in 2024.
Exchange rate stability during the year was supported by higher capital inflows, improved export earnings and expanding local refining capacity.
Looking ahead, the CBN projected economic growth of 4.49 per cent in 2026, driven by continued structural reforms, easing monetary conditions and increased investments in the oil and gas sector.
Headline inflation is projected to fall sharply to an average of 12.94 per cent in 2026, largely on the back of declining food prices and lower Premium Motor Spirit, PMS, costs.
The fiscal outlook for 2026 remains optimistic, with projected Federal Government retained revenue of N35.51 trillion and expenditure of N47.64 trillion, resulting in a provisional deficit of N12.14 trillion, equivalent to 3.01 per cent of GDP. Public debt is expected to rise modestly to 34.68 per cent of GDP by end-2026.
The external sector is projected to strengthen further, with the current account surplus expected to rise to $18.81 billion and external reserves increasing to $51.04 billion in 2026.
However, the CBN warned that the outlook remains exposed to risks, including unexpected inflationary pressures, global financial market volatility, climate-related disruptions to agriculture, crude oil production shocks and renewed geopolitical tensions.
“In 2026, the Bank would sustain its commitment to balancing price stability with supporting output growth,” the report said, adding that policy tools would be deployed to attract foreign investment, strengthen the foreign exchange market and safeguard financial system stability.
The CBN also emphasised the need to broaden the tax net and fully implement the Nigeria Tax Act, 2025, to support fiscal sustainability amid global uncertainty.
