NESG Sees 4.2% Growth as Reforms, Oil Output Lift Economy

Nigeria’s economic growth could rise to 4.5 percent in the second half of 2026, building on a projected 4.2 percent expansion for the full year, the Nigerian Economic Summit Group (NESG) has said.

The group said stronger crude oil production, improved security, domestic refining and progress on reforms could provide further support to the economy, even as inflation, insecurity and global shocks remain threats.

In its first half 2026 State of the Economy report, titled “Turning Potential into Progress,” NESG said the oil sector was expected to benefit from higher production and the gradual implementation of upstream reforms.

It added that rising domestic refining could strengthen industrial activity, reduce dependence on imported refined products and improve Nigeria’s external position.

Manufacturing is also expected to maintain its momentum as inflation eases, foreign exchange conditions stabilise and liquidity improves. NESG, however, said high borrowing and logistics costs, unreliable electricity and weak domestic demand would continue to restrict the sector.

The group expects agriculture to gain from improved rainfall and favourable harvest conditions, which could raise food production and ease supply pressures. It warned, however, that insecurity in major food-producing areas and flooding could reverse the gains.

Services are expected to remain the economy’s leading growth engine. Financial services could benefit from bank recapitalisation, increased credit and improved investor confidence, while ICT would be supported by digital adoption, rising data consumption and telecommunications investment.

NESG identified the global economic environment, geopolitical shocks, insecurity, climate disruptions and uncertainty surrounding the 2027 elections as major risks.

It said renewed trade tensions or tighter global financial conditions could weaken export earnings and foreign exchange inflows, while political activities could slow reforms and increase pressure on fiscal discipline.

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

Exchange-rate stability, tight monetary policy and favourable base effects, it said, could help contain price pressures.

NESG added that stronger oil output, increased foreign investment and faster reforms in taxation, power, infrastructure and the business environment could lift growth beyond its current forecast.