Nigeria’s central bank predicts 4.49% growth and 12.94% inflation in 2026
Nigeria’s central bank released its most recent projection on Tuesday, predicting 4.49% economic growth and inflation falling to an average of 12.94% in 2026, citing stable foreign exchange markets and increasing oil production as reforms take place.
After two years of extensive reforms by President Bola Tinubu’s administration, the prediction shows cautious optimism. The bank is banking on structural improvements in the foreign exchange, oil, and tax markets to maintain growth and disinflation.
Even as fiscal deficits and external vulnerabilities persist, the central bank’s 2026 projection calls for better non-oil growth and more resilient external buffers.
“The growth prospect in 2026 is positive on account of continued gains from broad-based structural reforms… and improved stability in the exchange rate,” the study from the central bank stated.
It also stated that loosening monetary policy will “add impetus to growth following the anticipated reduction in the cost of lending”.
In a show of confidence in the economy, Nigeria’s central bank lowered the deposit rate while maintaining its key rate at 27% (NGCBIR=ECI) and opening a new tab during its year-end meeting in November. The bank chose to allow inflation to continue to decline.
Following the first rate decrease since 2020 in September, economists had predicted a 100 basis-point cut, thus the action was unexpected.
The bank anticipates that headline inflation, which averaged 21.26% in 2025, will fall the following year as cost pressures are reduced by declining food and fuel costs and stable foreign exchange.
For the eighth consecutive month, November saw a slowdown in inflation to 14.45% (NGCPIY=ECI).
With an official exchange rate of about 1,400 naira to the dollar and oil production of about 1.50 million barrels per day, the prognosis places Nigeria’s main export at $55 per barrel.
According to the report, fiscal spending is anticipated to remain expansionary, with a deficit of 12.14 trillion naira, or 3.01% of GDP, mostly financed by domestic borrowing.
Supported by increased oil and non-oil exports as well as remittances, the bank anticipates a $18.81 billion current account surplus and an increase in external reserves to $51.04 billion.
