The Nigerian Economic Summit Group (NESG) has raised hope for stronger economic performance, projecting an expansion of 4.2 per cent, supported by gains across the oil, manufacturing, agriculture and services sectors.

In its first half 2026 State of the Economy report, titled ‘Turning Potential into Progress’ and released yesterday, the group expects growth to accelerate to 4.5 per cent in the second half of the year.
NESG said improved crude oil production, better security conditions and gradual implementation of upstream reform would sustain growth in the oil sector.

Increased domestic refining, it added, could further boost industrial output, reduce reliance on imported refined products and strengthen the country’s external position.

Manufacturing is also expected to maintain its momentum as lower inflation, foreign exchange (FX) rate stability and improved liquidity ease some production constraints and improve business confidence.

However, the group warned that unreliable electricity, high borrowing and logistics costs as well as weak domestic demand would continue to limit the sector’s expansion.

Agriculture could benefit from improved rainfall and favourable harvest conditions, potentially increasing food production and easing supply pressure, it said.

NESG, however, cautioned that insecurity in major food-producing areas and climate shocks, particularly flooding, could undermine the expected gains.

The services sector is expected to remain the main engine of growth, with financial services benefiting from bank recapitalisation, stronger credit provision and improved investor confidence. ICT growth is also expected to remain strong on the back of rising digital adoption, data consumption and investment in telecommunications infrastructure.

NESG identified global economic and geopolitical shocks, election-related uncertainty, insecurity and climate disruptions as major risks to its outlook.

It warned that renewed trade tensions or tighter global financial conditions could reduce export earnings and foreign exchange inflows, while political activities ahead of the 2027 elections could weaken reform momentum and put pressure on fiscal discipline.

The group also projected inflation to average 15.5 per cent in the second half and for the full year, citing insecurity, flooding, high transport costs, election-related spending, festive demand and elevated energy costs.

It said exchange-rate stability, the effects of tight monetary policy and favourable base effects could, however, moderate inflationary pressures.

NESG said stronger oil production, increased foreign investment and faster implementation of reforms in taxation, power, infrastructure and the business environment could push growth above its current projection.