Nigeria’s recent macroeconomic gains remain vulnerable to reversal unless the Federal Government consolidates ongoing reforms through stronger institutions, fiscal discipline, structural transformation and inclusive growth policies, the Nigerian Economic Summit Group (NESG) has warned.

The private-sector policy think tank said that although the country has begun to record measurable improvements following more than three years of difficult reforms, including the removal of the fuel subsidy and exchange rate unification, the current level of economic growth remains insufficient to generate enough jobs, reduce poverty, and improve living standards.

The concerns are contained in the latest NESG Economic and Policy Review Journal (H1 2026) titled ‘Consolidating Economic Stabilisation Gains: Medium-Term Policy Priorities’.

According to the report, Nigeria has entered a critical phase in its economic transformation, in which preserving the gains of macroeconomic stabilisation has become imperative to achieving resilient, broad-based and sustainable economic growth.

The NESG noted that while economic indicators point to gradual recovery, the gains remain fragile and could easily be reversed if reforms lose momentum or are not supported by stronger institutions and sustained implementation.

The report showed that Nigeria’s economy grew by 3.9 per cent in 2025, up from 3.2 per cent in 2024, driven largely by improved performance in the services sector, higher crude oil production and non-oil industrial activities.

The momentum was sustained in the first quarter of 2026, with the economy also expanding by 3.9 per cent, supported mainly by agriculture, manufacturing, construction and key service sectors such as information and communication technology (ICT), trade, finance and real estate.

Collectively, the sectors accounted for 90.3 per cent of economic growth and 83.6 per cent of total real gross domestic product (GDP).

The report further revealed that macroeconomic conditions improved considerably over the past year.

The NESG Macroeconomic Condition Index improved from -3 points in 2024 to -2 points in 2025, indicating that macroeconomic pressures were easing, albeit gradually.

Exchange rate stability also strengthened significantly, the report said.

The report stated that the naira appreciated in both the official and parallel foreign exchange markets in 2025, while the premium between both markets narrowed sharply from 6.8 per cent in 2024 to 1.7 per cent in 2025. Foreign exchange stability continued into the first half of 2026, supported by external reserves, which rose above $51 billion in June.

On inflation, the NESG said Nigeria experienced a sustained disinflation trend between April 2025 and January 2026 before geopolitical tensions in the Middle East reversed the gains.

Headline inflation, according to the report, increased from 15.1 per cent in January 2026 to 15.9 per cent in May, largely driven by rising food and energy prices.

Food inflation rose sharply from 12.1 per cent in February to 16.96 per cent in May, while core inflation also stood at 15.9 per cent.

Despite these improvements, the group warned that Nigeria’s fiscal position remains under pressure.

The NESG Debt Burden Index worsened from 70.9 points in 2024 to 75.9 points in 2025, the report said, highlighting increasing refinancing risks and growing concerns over medium-term debt sustainability.

According to the report, the developments demonstrate that macroeconomic stabilisation alone cannot guarantee long-term prosperity unless accompanied by structural reforms capable of improving productivity, strengthening institutions, attracting investment and expanding employment opportunities.

It said 2026 represents a decisive turning point for Nigeria, saying the country must move beyond short-term crisis management towards consolidating reforms that can deliver sustained improvements in productivity, competitiveness and citizens’ welfare.

It described the consolidation phase as the bridge between macroeconomic recovery and long-term economic transformation, warning that many developing economies lose reform momentum after achieving initial stability, leading to renewed inflation, exchange rate volatility and fiscal stress.

To avoid such setbacks, the report recommended preserving macroeconomic stability through stricter fiscal rules, rebuilding external reserves, broadening domestic revenue mobilisation and implementing a credible medium-term debt management strategy.

It also urged the government to deepen institutional reforms by improving regulatory quality, strengthening fiscal governance, enhancing public sector effectiveness and reducing policy uncertainty to improve the business environment and restore investor confidence.

The group advocated accelerated structural transformation through strategic investments in industrial parks, reliable electricity, digital infrastructure, trade logistics and affordable financing to stimulate private investment, productivity and job creation.

It called for expanded infrastructure financing through public-private partnerships, blended finance and other innovative funding mechanisms to close critical deficits in power, transport and logistics.

To ensure that economic growth translates into better living standards, the NESG recommended expanding the national social register, protecting savings from economic reforms for targeted social interventions, strengthening social protection programmes and increasing investments in education, healthcare and skills development.

The report concluded that Nigeria’s ability to convert recent macroeconomic improvements into resilient, inclusive and sustainable growth will depend on unwavering policy commitment, effective coordination across all levels of government, institutional credibility and sustained implementation of reforms.