EUR 10.00 For Business Accounts Only

Seizing Reform Gains | H1:2026 Nigeria Strategy Report

In H1:2025, Nigeria experienced its first taste of macroeconomic stability since 2023, and in our H2:2025 outlook, we asked key questions about how sustainable this recovery could be, given the starting point: inflation in the 30% range, the exchange rate hovering around NGN1,600/USD, weak FX reserves, and extraordinarily high fixed-income yields. Yet 2025 brought a breath of fresh air, and 2026 has the potential to turn this stability into a new norm, if we can effectively seize the gains from the reforms.
The structural reforms of recent years, including FX market liberalization, removal of fuel subsidies, and tighter monetary policy, are beginning to deliver tangible results. Inflation is on a downward trajectory, with further moderation likely in 2026. The Naira remains relatively stable, interest rate could ease in line with global trends, and fixed-income yields are expected to adjust accordingly. Collectively, these factors create a supportive macro backdrop for listed companies, making this an ideal moment to capitalize on the benefits of reforms.
Still, risks remain. Pre-election fiscal pressures and political uncertainty could trigger capital outflows and renewed pressures on inflation and the exchange rate. Tax reforms, while intended to broaden the base, ensure compliance, and avoid double taxation, may dampen market sentiment, particularly the introduction of the new capital gains tax. In addition, softer crude oil prices in 2026 could weigh on FX reserves, creating potential FX liquidity pressures.
Nevertheless, the overall outlook for 2026 remains positive. We encourage investors to position in 5–10-year FGN bonds, which are well placed to benefit from projected yield declines. In equities, players in the Consumer Goods, Telecommunications, Industrial Goods, and Agriculture sectors are expected to extend their momentum in 2026, supported by the stable macro backdrop and ongoing reforms.
Nigeria is on a recovery path, but sustaining momentum will depend on disciplined management of reforms across monetary and fiscal policy, ensuring that macro stability translates into long-term growth.