Nigeria’s currency and macroeconomic outlook is expected to improve steadily in 2026 as the Nigerian Economic Summit Group (NESG) projects the naira to trade at N1,480 to the dollar, supported by a stronger external reserve position estimated at $52 billion and deepening macroeconomic reforms.
The projection, unveiled in Lagos on Thursday, forms part of the NESG’s 2026 Macroeconomic Outlook titled “Consolidating Economic Stabilisation Gains: Pathway to Sustainable Growth in Nigeria”, which outlines the group’s expectations for inflation, growth, and fiscal performance over the medium term.
According to the private sector-led policy think tank, Nigeria is gradually transitioning from a period of crisis-driven policy adjustments into a consolidation phase, where recent reforms must be strengthened and translated into tangible economic outcomes.
NESG naira projection anchored on macroeconomic stability
The NESG naira projection reflects expectations that ongoing reforms in the foreign exchange market, fiscal coordination, and monetary management will continue to reduce volatility and restore confidence in the economy.
The group estimates that Nigeria’s external reserves could rise to about $52 billion in 2026, providing stronger buffers against external shocks and improving the Central Bank of Nigeria’s ability to manage liquidity and exchange rate pressures.
Alongside the exchange rate outlook, NESG forecasts inflation to ease to around 16 percent in 2026, before moderating further to single-digit levels of between 8 and 10 percent by 2027, assuming sustained policy discipline and improved supply-side conditions.
Economic growth is projected at 5.5 percent in 2026, driven by stronger output in agriculture and manufacturing, improved macroeconomic coordination, and increased private sector participation.
From crisis response to consolidation phase
Speaking at the launch, NESG Chairman Olaniyi Yusuf said Nigeria has entered a critical transition period that demands a shift away from short-term crisis management toward system-building and productivity-driven growth.
According to Yusuf, the consolidation phase represents the structural bridge between reforms and results, where stability must be leveraged to remove longstanding constraints to investment, output, and competitiveness.
“For Nigeria, consolidation requires a shift in emphasis,” Yusuf said. “Policy must move from inconsistency across sectors to coherence, from firefighting to system-building, and from short-term fixes to institutional strengthening.”
He explained that while recent reforms were difficult, they were unavoidable and necessary to address entrenched distortions in the foreign exchange regime, energy pricing framework, and monetary conditions.
NESG naira projection tied to reform discipline
The NESG naira projection assumes that authorities will maintain reform momentum, avoid policy reversals, and strengthen the quality of implementation across fiscal, monetary, and structural policies.
Yusuf warned that reform fatigue remains a risk but stressed that reversing reforms would be far more damaging to the economy in the long run.
“The challenge before us is to stay the course while refining and strengthening the quality of implementation,” he said, adding that the NESG would continue to support reforms through evidence-based analysis, sustained public-private dialogue, and continuous tracking of outcomes.
He noted that stabilisation should not be viewed as a temporary intervention but as a foundational process aimed at restoring macroeconomic predictability and reducing systemic volatility.
Inflation outlook and growth drivers
Providing further insight into the projections, Olusegun Omisakin, Chief Economist and Director of Research at NESG, said the 2026 outlook is grounded in the group’s medium-term macroeconomic framework extending to 2029.
Omisakin explained that agriculture and manufacturing are expected to play a central role in driving growth, particularly if productivity improves and policy consistency is maintained.
“Our projections align with what we have in our framework from 2026 through 2029,” he said.
“By emphasising agriculture and manufacturing, we believe the economy can achieve growth of about 5.5 percent in 2026.”
He added that sustained growth would depend on disciplined policy execution, infrastructure investment, improved access to finance, and reduced regulatory bottlenecks affecting productive sectors.
NESG naira projection and investor confidence
Analysts note that the NESG naira projection could boost investor sentiment if supported by credible policy actions, especially as Nigeria seeks to attract foreign capital, stabilise domestic markets, and strengthen private sector confidence.
A more stable exchange rate, combined with easing inflation and rising reserves, is expected to lower uncertainty for businesses, improve planning horizons, and reduce the cost of capital over time.
However, NESG officials cautioned that structural weaknesses remain, including infrastructure gaps, productivity constraints, and social pressures arising from the reform adjustment period.
They stressed that consolidation must be inclusive and focused on improving living standards, rather than merely achieving macroeconomic targets.
Looking ahead, NESG emphasised that the next phase of Nigeria’s reform journey must prioritise inclusive, job-rich growth that delivers measurable improvements in household welfare.
Yusuf noted that success should not be judged solely by percentages or headline indicators but by tangible changes in everyday economic conditions.
“The goal is not just stability,” he said. “It is to convert stability into sustained growth, higher productivity, and improved quality of life for Nigerians.”
With the NESG naira projection signalling cautious optimism, the outlook for 2026 hinges largely on whether reform gains can be consolidated, institutions strengthened, and policy consistency maintained across successive budget cycles.
If these conditions are met, the group believes Nigeria could gradually shift from stabilisation to a more resilient and competitive growth trajectory over the medium term.
