NESG says Nigeria is out of acute economic crisis, but warns fragile gains could quickly unravel

The Nigerian Economic Summit Group (NESG) has declared that Nigeria has exited what it described as an “acute economic crisis,” projecting a 5.5 per cent growth rate for 2026, even as it cautioned that the apparent recovery remains fragile and could easily be reversed.

The projection was unveiled on Thursday at the launch of the NESG’s 2026 Macroeconomic Outlook, titled “Consolidating Economic Stabilisation Gains: Pathway to Sustainable Growth in Nigeria.” While the group forecast stronger macroeconomic indicators – including foreign reserves rising to $52bn – it repeatedly warned that the next 18 months would be decisive in determining whether the economy truly stabilises or slides back into stagnation.

Speaking at the event, NESG Chairman, Niyi Yusuf, said Nigeria had just emerged from a painful adjustment phase driven by recent structural reforms, but stressed that stabilisation should not be mistaken for economic health.

“Nigeria has just come out of one of the most disruptive adjustment periods in its recent economic history,” Yusuf said. “But economic transformation is not a one-off event. It is a sequenced and continuous process.”

He acknowledged that the reforms were unavoidable, describing them as necessary for stabilisation, but cautioned against triumphalism. “Stabilisation alone does not mean prosperity,” he said, noting that growth remains “modest and uneven,” concentrated in a narrow range of sectors with limited impact on jobs and household incomes.

Yusuf warned that mismanaging the next phase could trigger policy fatigue and inconsistency. “The real challenge now is how to consolidate the gains already made and convert them into sustainable and inclusive growth. Skipping steps or confusing one phase for another could prove costly,” he said.

Presenting the technical outlook, NESG Chief Economist, Dr Olusegun Omisakin, echoed the caution, arguing that while the economy may no longer be in free fall, it remains vulnerable.

“The crisis phase may be behind us, but this is not a moment for complacency,” Omisakin said. “This is the window to critically assess how the gains achieved so far can be optimised.”

According to the outlook, Nigeria’s GDP growth is expected to rise to 5.5 per cent in 2026, inflation to average about 16 per cent, and external reserves to climb to $52bn. However, Omisakin admitted that these targets would require unusually disciplined policy implementation.

“Our long-term inflation goal should be single digits by 2029,” he said, adding that Nigeria’s current growth of about 3.8 per cent remains below the level needed to deliver meaningful development.

A central concern raised in the report is the risk of reform reversal. Omisakin pointed to experiences in countries such as Ghana and Brazil, where early stabilisation gains were squandered after governments relaxed reform momentum.

“History shows that after about 18 months, many countries lose focus,” he warned. “When consolidation is weak, the economy slips back to 2 or 3 per cent growth, which is exactly where Nigeria has been for years.”

The NESG also questioned the sustainability of Nigeria’s growth structure, noting that the services sector currently accounts for about 60 per cent of GDP, with limited job creation. Omisakin argued that without a stronger push into agriculture and manufacturing, the projected growth may not translate into broad-based prosperity.

“We cannot rely on services alone,” he said. “Structural transformation, particularly linking agriculture to manufacturing, is essential. If consolidation is handled properly, manufacturing growth of between 6 and 8 per cent is possible – but that is far from guaranteed.”

In closing, Omisakin urged sustained pressure from the private sector and civil society to keep reforms on track, warning that political distractions and weak implementation could quickly erode the modest progress made.

“Nigeria may have turned a corner,” he said. “But without discipline, transparency and consistency, there is a real risk of sliding back. The hard part starts now.”