Nigeria’s economy is gradually stabilising following recent macroeconomic adjustments, but the recovery remains delicate and heavily dependent on sustained reforms, according to Dr Yemi Kale, Chief Economist at Afreximbank.
Kale made the remarks on Tuesday while speaking at the Nigeria Economic Outlook 2026 hybrid event organised by FirstBank in Lagos. The event, themed “The Great Calibration: Mastering Resilience in an Era of Asynchronous Growth,” brought together policymakers, business leaders and economists to assess Nigeria’s medium-term outlook.
He noted that recent improvements in inflation dynamics, foreign exchange flexibility and external reserve levels have created what he described as “much-needed policy space” for economic management. However, he cautioned that macroeconomic stability alone does not resolve Nigeria’s deep-seated structural challenges.
According to Kale, persistent infrastructure gaps, unreliable energy supply, elevated logistics costs, skills mismatches and ongoing security concerns continue to suppress productivity and limit the economy’s ability to deliver broad-based welfare improvements.
“These constraints weaken the transmission of growth into meaningful improvements in living standards,” he said, stressing that without structural reforms, economic gains may remain uneven and unsustainable.
Kale identified digital innovation, agro-industrial value chains, services exports and deeper regional trade integration as key areas where Nigeria could unlock new growth opportunities if structural bottlenecks are addressed.
He emphasised that fiscal discipline, institutional strengthening and credible policy implementation are essential to building long-term economic resilience. Sustained investment in infrastructure and human capital development, he added, would be critical to boosting competitiveness and productivity.
The Afreximbank economist also highlighted the importance of private sector participation and sustainable finance in supporting government-led growth initiatives. Under a baseline scenario, he projected Nigeria’s GDP growth to range between 3.5 and 4.5 percent in 2026.
In a more optimistic scenario driven by strong reform momentum, growth could accelerate to between 5 and 6 percent. However, Kale warned that any slowdown or reversal in reforms could drag growth down to between 2 and 3 percent.
He said the unification of Nigeria’s foreign exchange framework has restored confidence and improved transparency, forecasting that the naira could trade between ₦1,350 and ₦1,450 per dollar. External reserves, he added, could approach $45 billion if current policies are maintained.
While Nigeria’s debt-to-GDP ratio remains moderate at around 40 percent, Kale cautioned that affordability risks persist due to high debt servicing costs amid constrained fiscal revenues. He urged policymakers to stay the course on reforms to strengthen resilience, support job creation and ensure growth translates into tangible benefits for citizens.
