The country’s external reserves are likely to rise to $51.04 billion in 2026 supported by ongoing reforms in the foreign exchange market, the Central Bank of Nigeria (CBN) has said. The apex bank, which made the projection in its macroeconomic outlook for 2026, released yesterday, also projected that the economy would expand by 4.49 per cent in 2026, from an estimated 3.89 per cent in 2025.
According to the report, the CBN sees headline inflation easing to an estimated average of 12.94 per cent in 2026, propelled by, “declining food and Premium Motor Spirit (PMS) prices.”
The report stated: “The year 2026 presents a realistic window of opportunity for macroeconomic stabilisation. The Nigerian economy is expected to continue expanding, with growth projected at 4.49 per cent in 2026. The projection is hinged on continued gains from broadbased structural reforms and a gradually easing monetary policy stance.
“These are expected to further improve the business environment, enhance investor confidence and support private-sector-led growth. The growth momentum is also anticipated to be complemented by increased production and investments in the oil sector, supported by improved security surveillance, alongside gains from enhanced domestic refining capacity.
“Headline inflation is projected to moderate to an estimated average of 12.94 per cent in 2026, driven by declining food and premium motor spirit (PMS) prices.” It further said: “The positive trend in the external position is expected to be sustained in 2026, supported by strong exports, steady remittances inflow, increased oil & gas output, improved domestic refining capacity and rising global demand from key trading partners.
“The current account surplus is expected to rise to $18.81 billion, while increased portfolio investment inflows and external borrowings are projected to keep the financial account in a net borrowing position of $10.15 billion. “The International Investment Position (IIP) is projected to record a net borrowing position of $69.58 billion in 2026, as attractive yields are anticipated to further boost capital inflows.
Reforms in the foreign exchange market are expected to sustain exchange rate stability, while external reserves is projected to increase to $51.04 billion.” The apex bank also said in the report that its fiscal outlook for 2026 is “optimistic,” adding that this will be, “driven by sustained non-oil revenue collection and continued implementation of the Nigeria Tax Act, 2025, alongside other policy reforms.”
It stated: “The FGN retained revenue and expenditure are projected at N35.51 trillion and N47.64 trillion, respectively, resulting in a provisional deficit of N12.14 trillion (3.01% of GDP). Public debt as a percentage of GDP is projected at 34.68 per cent by end-2026, compared with 33.98 per cent as at June 2025, predicated on expected new borrowings.” However, the report highlighted risks, that it said, could undermine the outlook for the economy. Specifically, it stated that: “Unanticipated headwinds may upturn the expected deceleration in inflation.
Inflation projections could be derailed if fiscal expenditure rises disproportionately above the benchmark or if a sudden deterioration in global financial market condition triggers capital reversals that could rekindle exchange rate volatility. Growth prospects could be adversely affected if an unlikely reversal of the expected disinflation necessitates monetary tightening.
“Unfavourable climatic conditions and potential disruptions to crude oil production could also dampen projected output growth, impair budget implementation and weaken overall macroeconomic performance.
In addition, unanticipated headwinds, such as continued geopolitical tensions and re- escalation of protectionist trade policies could adversely affect the trade balance and exchange rate stability. “A significant rise in nonperforming loans could impair asset quality, and weaken banks’ balance sheets, thereby posing systemic risk. Also, higher concentration risk from the ongoing banking sector recapitalisation could trigger investor fatigue and crowdout other issuers. Together, these could derail the outlook for the financial sector.”
In his forward for the report, CBN Governor, Mr. Olayemi Cardoso, said: “The expected continuation of the disinflationary trend will provide a firm basis for the Bank’s gradual transition to a full-fledged inflation-targeting framework. “Likewise, the exchange rate is projected to remain broadly stable, supported by rising diaspora remittances, higher oil receipts, and strong investor confidence. The Bank remains committed to discharging its mandate in a manner that balances the objectives of price stability and sustainable economic growth.”
