22.05.2026
Nigeria’s economy continued to stabilise in 2025, supported by stronger services activity, improved external balances, tighter monetary policy and the effects of recent macroeconomic reforms. Growth is expected to remain moderate in 2026–2027 as reform gains support business activity and investment, but structural constraints continue to limit a stronger expansion. Inflation has declined from its 2024 peak, although it remains high and vulnerable to fuel, food and exchange-rate pressures. Fiscal and external positions have improved, helped by higher revenues and stronger oil receipts, but poverty remains elevated and the economy remains exposed to insecurity, policy uncertainty and global financial volatility.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 4.0 | 4.1 | 4.2 |
| Inflation (%, yoy) | 23.0 | 14.9 | 12.1 |
| International poverty rate ($3.00, 2021 PPP, %) | 50.9 | 50.5 | 49.0 |
| Fiscal balance (% of GDP) | -3.1 | -2.9 | -3.1 |
| Gross public debt (% of GDP) | 38.7 | 36.0 | 38.5 |
| Current account balance (% of GDP) | 4.8 | 6.0 | 3.8 |
Growth stabilises but remains below potential
Nigeria’s real GDP growth stabilised at 4.0% in 2025, supported mainly by services, while agriculture and industry expanded more modestly. Services continued to benefit from stronger domestic activity, improved macroeconomic stability and gradual recovery in confidence, but infrastructure gaps, insecurity and weak productivity continued to constrain broader growth.
Growth is projected at 4.1% in 2026 and 4.2% in 2027. The outlook is supported by improved policy credibility, higher oil prices and continued non-oil activity. However, stronger growth will require reforms that reduce the cost of doing business, improve electricity supply, deepen credit access and support private investment outside oil and low-productivity services.
Inflation declines but remains high
Inflation fell from 33.2% in 2024 to 23.0% in 2025, helped by tight monetary policy, exchange-rate appreciation and improved agricultural output. Food inflation has moderated, but price levels remain high and continue to weigh heavily on household purchasing power.
Inflation is projected to decline to 14.9% in 2026 and 12.1% in 2027. The decline is expected to be gradual, with risks from fuel costs, food prices, exchange-rate volatility and global energy-market disruptions. Continued monetary policy discipline will be important to anchor expectations and protect the disinflation process.
Fiscal position improves only gradually
The fiscal deficit widened slightly to 3.1% of GDP in 2025, as higher wage costs, interest payments and state-level capital spending offset stronger revenues. Non-oil revenue collection improved, while oil receipts remained broadly stable despite lower oil prices during much of 2025.
The deficit is projected to narrow to 2.9% of GDP in 2026 before widening slightly to 3.1% in 2027. Public debt declined to 38.7% of GDP in 2025, helped by growth and naira appreciation, and is projected to remain moderate. However, debt-service costs, low revenue mobilisation and election-related spending pressures remain important fiscal risks.
External position remains in surplus
Nigeria’s current account surplus reached 4.8% of GDP in 2025, supported by resilient oil exports, improving non-oil exports and subdued import demand. Gross reserves increased during the year as short-term foreign-exchange liabilities were cleared, improving external buffers.
The current account surplus is projected to increase to 6.0% of GDP in 2026, helped by higher oil export revenues, before narrowing to 3.8% in 2027 as imports recover and global conditions normalise. The external outlook remains exposed to oil prices, capital-flow volatility, exchange-rate confidence and global financial conditions.
Overall outlook
Nigeria’s outlook has improved, but the recovery remains incomplete. Growth is expected to remain around 4% in 2026–2027, while inflation should decline gradually from very high levels. Fiscal and external positions are stronger than during the recent crisis period, but poverty remains extremely high and structural constraints continue to limit inclusive growth. Sustained progress will depend on maintaining reform momentum, strengthening revenue mobilisation, reducing inflation, improving security, expanding productive employment and investing in infrastructure and human capital.
Sources:
World Bank, Nigeria Macro Poverty Outlook, April 2026.
International Monetary Fund, World Economic Outlook, April 2026.
International Monetary Fund, Nigeria country data, April 2026.
Central Bank of Nigeria, Monetary Policy Committee Communiqué, May 2026.
African Development Bank, Nigeria Economic Outlook, 2026.
