Nigeria could see inflation slow to as low as 10 per cent in the first half of 2026 and economic growth rise to five per cent if current reforms are sustained, according to the 2026 macroeconomic outlook released yesterday by Comercio Partners.

The firm said Nigeria is moving from reform shock to macroeconomic stabilisation, with moderating inflation, improving foreign exchange liquidity and stronger policy credibility shaping expectations for the year ahead.

Comercio stated that the global environment is also shifting, noting that the tightening cycle across major economies is ending, although liquidity is not returning to excess levels.

“Policy is moving from restraint to calibration. Capital is adjusting to that reality,” the firm said.

Global growth is projected at about 3.8 to four per cent in 2026, with inflation trending lower across major economies. Central banks are beginning to ease policy at a controlled pace, keeping real interest rates positive and financial conditions contained.

The outlook noted that 2025 was shaped by policy shocks, including a change in United States leadership that triggered tariff measures and trade disruptions. Although markets reacted sharply at first, most economies have begun structural adjustments. Inflation moderated globally but did not decline as quickly as expected due to tariff-related shocks and renewed geopolitical tensions.

Concerning Nigeria, Comercio said a key development in 2025 was the rebasing of inflation by the National Bureau of Statistics (NBS), which addressed data outliers. Inflation closed the year at about 15 to 16 per cent, showing a downward trend despite earlier spikes above 30 per cent during reform adjustments.

It stated that inflation spikes have historically followed major reforms under successive civilian administrations, but usually moderate once policies stabilise.

“Inflation remains elevated in level terms, but momentum is moderating. There has been no renewed acceleration,” the firm said.

Factors supporting disinflation, according to the firm, include a good harvest season, improved climate conditions without major flooding, stabilising petrol prices, exchange rate stability and improved foreign exchange liquidity.

For 2026, Comercio outlined three scenarios. In the best case, inflation could fall to 10 to 11 per cent in the first half of the year, driven by monetary discipline, improved agricultural output, stable oil prices and continued foreign exchange stability.

The base case projects inflation around 16 per cent, assuming moderate oil prices of 75 to 80 dollars per barrel. The worst case sees inflation rising to between 18 and 22 per cent if oil prices become volatile, climate shocks occur, insecurity rises, or fiscal and monetary policies become misaligned.

On growth, Nigeria’s economy expanded by about four per cent in the fourth quarter of 2025, bringing full-year growth to roughly 3.8 per cent, supported by services, agriculture and a recovery in oil production. Strong Purchasing Managers’ Index (PMI) readings above the 50 thresholds also signalled expansion.

In 2026, growth could reach five per cent in the best case, supported by higher oil output, strong agricultural production and continued expansion in the financial sector.

The base case is 4.5 per cent, while the worst-case ranges between 3.5 and 3.75 per cent, with risks tied to insecurity, climate disruptions, pre-election uncertainty and possible policy reversals.

Comercio said the Central Bank of Nigeria (CBN) demonstrated improved independence and data-driven decision making in 2025, holding rates for most of the year before implementing a 50-basis point cut toward year’s end. The Monetary Policy Rate (MPR) stands at about 26.05 per cent.

It expects gradual rate cuts of two to three times in 2026, bringing the policy rate to between 23.5 and 25 per cent. “Easing will be measured to prevent overheating and preserve credibility,” the firm stated.

On the exchange rate, the firm noted that after sharp volatility in 2024, the naira stabilised through 2025 due to foreign exchange unification, central bank intervention, improved reserves and a narrowing gap between official and parallel markets.

In 2026, the best case projects the naira at N1,200 to the dollar, supported by strong oil production, prices above 70 to 75 dollars and sustained capital inflows. The base case sees the currency at N1,400 to N1,450, while the worst case puts it between N1,500 and N1,600 if capital flight rises, oil production falls, or reserves weaken.

The firm also reviewed the performance of the Nigerian Exchange Limited, which delivered about 51 per cent return in 2025. Gains were driven by consumer goods, industrial goods, banking and oil and gas stocks, with domestic participation increasing significantly.

However, it expects returns in 2026 to be more moderate due to pre-election uncertainty and possible capital outflows later in the year. Still, macroeconomic stability, improving corporate earnings and rising pension fund exposure to equities are expected to support valuations.

In the banking sector, a recapitalisation deadline of March 2026 is expected to drive consolidation and strengthen balance sheets. The oil and gas sector remains cautiously optimistic with increased upstream capacity but is sensitive to oil price swings.

Agriculture is expected to remain fundamentally strong despite softer global commodity prices, while telecommunications performance is supported by 5G expansion and fintech integration. Consumer goods firms have returned to profitability, with stable foreign exchange expected to support margins.

Summing up, Comercio said Nigeria is entering 2026 with moderating inflation, improving growth, greater monetary policy credibility, exchange rate stability and stronger equity market fundamentals.