Nigeria’s domestic economy is navigating a reform-defining phase shaped by macroeconomic adjustment, demographic pressure, and policy realignment. After years of subdued growth driven by structural rigidities, foreign exchange distortions, and fiscal stress, the economy is gradually re-anchoring around market-based reforms that are reshaping growth dynamics, labour outcomes, and capital pricing.
For investors, Nigeria remains a paradoxical market: short-term volatility is elevated, yet medium- to long-term fundamentals remain compelling, underpinned by scale, population growth, and sectoral depth. Understanding the interaction between inflation, exchange rates, GDP growth, unemployment, and interest rates is therefore critical to assessing domestic demand resilience and investment timing.
In 2026, GDP growth is projected to accelerate to around 4.00 to 4.50 per cent as macro stabilization gains traction. Services are expected to remain the dominant growth driver, supported by recovering consumer purchasing power, digital adoption, and telecommunications expansion, including ongoing 5G rollout. Agriculture is projected to grow modestly at 3.50 to 3.80 per cent, constrained by insecurity but supported by targeted credit schemes and potential productivity gains if farmer-protection initiatives are sustained. Manufacturing remains the most vulnerable sector, with growth likely capped at 1.50-2.00% due to high borrowing costs and energy prices, although the full operationalisation of the Dangote Refinery and modular refineries could meaningfully reduce fuel-related input costs. The oil and gas sector is poised for a rebound, with crude production expected to stabilise around 1.70-1.80 million barrels per day as the Petroleum Industry Act (2021) implementation matures and pipeline security improves.
Nigeria’s domestic economy presents a cautiously constructive investment narrative. Structural reforms are improving transparency and policy credibility, growth is broadening beyond oil, and macro stability is gradually strengthening. However, material risks persist, including security challenges, infrastructure deficits, policy execution risks, pre-election and extra-budgetary outlay, and external shocks from global financial conditions such as rising protectionism and oil price volatility.
For investors, this environment favours strategic selectivity, long-term positioning, and alignment with sectors that enhance productivity, employment quality, and domestic value creation. Nigeria remains a high-risk, high-potential market, but for patient capital with informed execution, the domestic economy continues to offer pathways to sustainable returns across the cycle.
