2026 Economic Outlook: Analysts Hail Naira Stability, Call for Continued Fiscal Discipline
Speaking at the FirstBank "Nigeria Economic Outlook 2026" event in Lagos, Dr. Yemi Kale, Group Chief Economist at Afreximbank, provided a definitive roadmap for the nation's recovery. Under the theme "The Great Calibration: Mastering Resilience in an Era of Asynchronous Growth," Dr. Kale confirmed that while the macro-economy is finally stabilizing, Nigeria remains at a strategic juncture where policy consistency is the only path to long-term prosperity.
According to Dr. Kale, the "bitter pill" of 2024 and 2025 reforms—including exchange rate unification and subsidy removal—has begun to yield a more predictable planning environment. However, he warned that "stabilization is a technical milestone, not an immediate social relief," urging the government to bridge the gap between positive data and household reality.
1. 2026 Growth Projections: Baseline vs. Optimistic
Dr. Kale provided a nuanced forecast for Nigeria's GDP growth in 2026, anchored on the continuation of current reforms:
Baseline Scenario: 3.5% – 4.5% GDP growth, assuming oil production remains stable and FX liquidity continues to improve.
Optimistic Scenario: 5% – 6% GDP growth, achievable if the government successfully addresses structural bottlenecks like energy and logistics.
The Warning: Growth could slump back to 2% – 3% if reform momentum is abandoned or if fiscal discipline wavers.
2. Five Sectors Driving the 2026 "Calibration"
Dr. Kale identified five pivotal sectors that will move the needle on Nigeria’s productivity this year:
ICT & Digital Services: Fintech and broadband expansion remain the fastest-growing sub-sectors.
Construction & Infrastructure: Fueled by massive public works like the Lagos-Calabar Coastal Highway.
Energy & Refining: The post-Dangote Refinery era is creating new petrochemical linkages and reducing FX demand for fuel.
Agro-Processing: Moving from raw commodity exports to "Value-Added" clusters to benefit from the AfCFTA.
Professional Services: A recovery in retail, transport, and real estate as inflation begins to moderate.
3. "Structurally Diversified, but Not Productively Diversified"
In a standout critique, Dr. Kale noted that while Nigeria’s GDP is no longer dominated by oil in terms of volume, it remains "oil-dependent" for value.
"We are structurally diversified, but not productively diversified. To build real resilience, we must move from extractive dependence to productive competitiveness by fixing unreliable power and weak logistics." — Dr. Yemi Kale
He emphasized that the current $18.81 billion current account surplus projection is a "policy cushion" that must be used to fund human capital and infrastructure, rather than just defending the Naira.
The Real Estate & Housing Takeaway
Dr. Kale’s analysis suggests that 2026 is the year of "The Great Entry."
Moderating Inflation: Dr. Kale projects that headline inflation could fall toward 14% by the end of 2026 if reforms hold. This will stabilize the cost of building materials (cement, steel, and finishing), allowing for more accurate project budgeting.
Infrastructure-Led Appreciation: With "Construction & Infrastructure" named a top growth driver, property values along new transport corridors are expected to see double-digit capital appreciation.
Lower Risk Premium: As FX volatility drops below 4% (as seen in 2025), foreign and diaspora investors can exit and enter positions with greater confidence, increasing liquidity in the luxury and mid-market residential segments.
