As Nigeria enters 2026, the nation's economic landscape is showing promising signs of recovery and resilience, transforming from a period of intense challenges to a trajectory of cautious optimism.

The International Monetary Fund projects Nigeria's GDP growth at an encouraging 4.2 percent in 2026, positioning the country as a significant economic player in Africa with a nominal GDP of approximately $334 billion.

Multiple economic institutions, including the Centre for the Promotion of Private Enterprise and Fitch Ratings, align in their optimistic projections, highlighting growth driven by non-oil sectors such as services, telecommunications, finance, construction, and real estate - which already account for 53 percent of GDP by late 2025.

Inflation, a persistent challenge, has shown remarkable improvement, decelerating from 24.48 percent in January 2025 to 14.45 percent by November. The African Development Bank anticipates an average inflation rate of 17.3 percent in 2026, with expectations of further reduction to around 14 percent by year-end.

The Nigerian naira has stabilized in the N1,440-N1,500/$ range, bolstering business confidence. Foreign exchange reserves have reached a five-year high of $45.24 billion, projected to range between $40-55 billion in 2026 and offering nearly 11 months of import cover.

However, challenges remain. Rising debt levels pose significant risks, with debt service obligations exceeding N15 trillion in the 2026 budget - representing about 50 percent of projected revenue. Oil production and prices continue to be volatile, with average prices potentially falling below $60 per barrel due to market oversupply.

Muda Yusuf, Director-General of CPPE, describes 2026 as a potential 'turning point,' emphasizing that continued reform momentum could enable decisive growth, particularly if security improves and pre-election fiscal discipline is maintained.

Despite macroeconomic improvements, the transmission of these gains to everyday Nigerians remains a critical challenge. The World Bank estimates 139 million people are still in poverty, underscoring the need for inclusive economic strategies that translate statistical progress into tangible household relief.

Looking ahead, growth is expected in digital economy sectors, with projected revenues up to $18.3 billion through fintech and AI innovations. The services sector remains a primary economic engine, while agriculture is anticipated to see modest growth of 3.7-3.8 percent.