Economic Associates, Proshare project 5.55% GDP growth, 6.57% inflation for Nigeria in 2026

Economic Associates and Proshare Nigeria Limited have projected that Nigeria’s economy will grow by 5.55 per cent in 2026, with headline inflation easing to 6.57 per cent by December of the year.

The projections are contained in the Country Watch Nigeria 2026 Edition, the second publication in the firms’ jointly produced institutional macroeconomic surveillance series released on Tuesday in Lagos.

The report forecasts gross foreign reserves in the range of $51.5 billion to $60 billion in 2026, while the Nigerian Exchange All-Share Index (ASI) is projected to climb to 249,000 points. The NFEM exchange rate is expected to settle at N1,318/US$, with nominal GDP rising to $359.78 billion.

According to the publication, real GDP growth is projected at 6.4 per cent by the second quarter of 2026, outpacing the 4 per cent full-year projection by the World Bank and the International Monetary Fund.

Three macroeconomic phases

The report organises Nigeria’s economic trajectory since 2020 into three distinct phases — Pre-Reform, Reform, and Recovery — using what it described as a phased dating framework.

It noted that the Pre-Reform Phase (January 2020 to May 2023) was marked by persistent naira depreciation, FX premiums peaking at 68 per cent, inflation rising from 12 per cent to 22 per cent, negative real interest rates, and a contraction in dollar GDP from $569 billion in 2019 to $352 billion by 2023.

The Reform Phase (June 2023 to November 2024), which followed market-oriented liberalisation policies including FX market unification and fuel subsidy removal, initially triggered adjustment costs. Inflation peaked at 34.6 per cent in November 2024, while the naira weakened further. However, FX premiums narrowed to 5 per cent, and net foreign reserves rose from $4 billion to $23 billion, with real GDP growth improving to 3.5 per cent.

The Recovery Phase (December 2024 through 2025), the report stated, delivered measurable stabilisation. The naira appreciated to N1,436/US$ by December 2025, FX premiums fell to 2 per cent, and inflation decelerated by 1,945 basis points from its peak. Real GDP growth reached 4.23 per cent in Q2 2025, with 42 of 46 sectors expanding.

Key findings

On price stability, the report attributed inflation deceleration primarily to exchange rate stabilisation and improved net foreign reserve dynamics. It noted that real interest rates turned positive for the first time in over five years, restoring confidence in naira-denominated instruments.

The ASI gained more than 51 per cent in nominal terms in 2025, closing at 155,613 points.

On market liquidity, gross foreign reserves climbed to a 13-year high of $50.45 billion as of February 16, 2026, while net foreign reserves rose to approximately $32 billion at the start of the year. Past due obligations declined from $29 billion in 2023 to $16 billion by November 2025, and total financial issuance surged to $69 billion in 2025.

In terms of output growth, dollar GDP increased to $308 billion in 2025 — the first expansion since 2019 — while the Nigerian Exchange’s market capitalisation crossed N125.97 trillion ($92.63 billion) by February 23, 2026.

Risks and policy priorities

The report identified five major risks to the outlook: external commodity and capital flow shocks, reform sustainability concerns, insecurity, pre-election fiscal pressures, and potential misalignment in tax strategy.

It recommended four structural priorities, including harmonising reserve reporting, improving net reserve disclosure frequency, rebuilding foreign direct investment stock, and aligning the Monetary Policy Rate with market-determined benchmarks.

Commenting on the findings, Dr Ayo Teriba, Chief Executive Officer of Economic Associates, said Nigeria’s recovery phase reflects “structural gains, not seasonal adjustments,” citing the compression of the exchange rate premium from 71 per cent to 2 per cent and a sevenfold rise in net foreign reserves from their 2023 low.

Olufemi Awoyemi, Founder and Chairman of Proshare Nigeria Limited, said the series was designed to provide institutional-grade macroeconomic intelligence for capital allocation decisions, sovereign risk analysis, and corporate treasury management.

The Country Watch Nigeria 2026 Edition is available on subscription, with annual access priced at N475,000 for Professional tier, N1.575 million for Institutional access covering up to five users, and N3.85 million for Enterprise-wide access.