Nigeria’s economic and business environment is witnessing a dynamic first quarter of 2026, characterized by major infrastructure investments, fiscal adjustments, sectoral reforms, and corporate earnings announcements.
From multi-billion-dollar oil developments to significant government borrowing plans, debt settlements in the power sector, and shifts in sovereign investment returns, these developments collectively shape the trajectory of the Nigerian economy. This report presents a detailed account of recent events and trends across key sectors, offering insights into opportunities, challenges, and policy implications for investors, businesses, and regulators.
Federal Government Raises 2026 Borrowing Target by N11 Trillion
The Federal Government has revised its borrowing plan for 2026 upward to N29.2 trillion, signaling a significant expansion in its fiscal activities. The new borrowing figure represents an increase of N11.31 trillion from the initial projection of N17.89 trillion stated in the 2026 Abridged Budget Call Circular released in December 2025.
This adjustment comes amid a broader rise in total government expenditure, which is now projected at N68.32 trillion for the year, against expected revenues of N36.87 trillion. The fiscal gap, therefore, stands at N31.46 trillion. Government officials plan to fund the deficit primarily through domestic and external borrowing, complemented by N189.16 billion from asset sales and privatisation, and N2.05 trillion from multilateral and bilateral project loans.
The decision to increase borrowing aligns with President Bola Tinubu’s request to allocate an additional N9.09 trillion to fund critical infrastructure projects, judiciary strengthening, healthcare interventions, and election-related expenditures ahead of the 2027 general elections. Analysts highlight that domestic debt service obligations will total N10.16 trillion, while foreign debt service is projected at N5.36 trillion, underscoring the fiscal pressures associated with rising debt levels.
Experts have cautioned that while higher oil revenues and telecom sector contributions could partially offset the deficit, the heavy reliance on borrowing risks straining Nigeria’s debt sustainability, potentially crowding out private sector credit and limiting fiscal flexibility. Former Vice President Atiku Abubakar and other economic commentators have stressed the need for strict fiscal discipline, transparency in public spending, and prioritisation of revenue-generating projects to mitigate long-term risks.
ExxonMobil Plans $10 Billion Deep-Water Projects
ExxonMobil has announced readiness to move forward with multi-billion-dollar deep-water projects in Nigeria, collectively valued at approximately $10 billion. The initiative will begin with an infill drilling program at the Usan deep-water asset, estimated at $1 billion, with ExxonMobil committing 30% of the investment to early works.
The company, in partnership with Chevron, TotalEnergies, Nexen Petroleum, and NNPC Ltd, plans to raise national oil production from 100,000 barrels per day (bpd) to 250,000 bpd over the next five years, while producing 100 million standard cubic feet per day (mmscf/d) in gas. Central to this strategy is the Owowo deep-water field, which holds estimated reserves of between 500 million and one billion barrels of oil. The field will be tied back to the Usan Floating Production Storage and Offloading (FPSO) facility, requiring substantial infrastructure investment.
Development of Owowo is expected to involve 20 to 40 wells, making it at least twice the size of Shell Nigeria’s Bonga North field. Jagir Baxi, ExxonMobil’s Nigeria Chairman, indicated that the combination of Usan infill drilling, Erha field campaigns, and Owowo development could unlock 160,000 bpd in oil and 100 mmscf/d of gas, reinforcing Nigeria’s position in the global energy market and boosting national energy security.
The projects are also expected to deliver significant economic benefits, including job creation, technology transfer, and increased local content participation. Regulatory approvals and FID declarations are anticipated in the coming months, providing investors and stakeholders with clearer timelines for cash flow and production outcomes.
NSIA Profit Plunges 91% in 2025
The Nigeria Sovereign Investment Authority (NSIA) reported a dramatic 91% decline in profits for 2025, dropping to $107 million from $1.24 billion in 2024. The sharp decrease was attributed primarily to the absence of the extraordinary foreign exchange gains that bolstered the previous year’s earnings.
In 2024, NSIA benefitted from a $566.9 million forex gain following a sharp devaluation of the naira, which increased the value of its US dollar-denominated holdings. The 2025 report shows that forex-linked collateralised securities contributed only $3.1 million, compared to $407.9 million in the prior year. Other investment areas, including equity-method investments and agricultural infrastructure projects, recorded weaker returns.
Despite the profit decline, core operations showed resilience. Total interest income rose to $197.3 million, while core operating income increased by 6% to $349.07 million. Total assets grew to $3.42 billion, bolstered by increased government contributions totaling $2.06 billion. NSIA reaffirmed its focus on long-term wealth preservation and fiscal stability, maintaining retained earnings of $5 billion for strategic investment in infrastructure, health, and education.
The profit decline serves as a reminder of the vulnerability of sovereign wealth funds to external economic shocks, foreign exchange fluctuations, and market volatility. Policymakers and fund managers have emphasized the importance of diversified investment strategies and long-term risk management in sustaining the authority’s mandate.
FG Approves N3.3 Trillion Power Sector Debt Bailout
President Bola Tinubu has approved a N3.3 trillion debt settlement for Nigeria’s power sector, aimed at resolving legacy obligations that have hindered generation and distribution. The initiative targets debts accumulated between February 2015 and March 2025, covering both government agencies and private power producers.
Implementation has begun, with 15 power plants entering settlement agreements worth N2.3 trillion. Of the N501 billion allocated for this phase, N223 billion has already been disbursed. Officials noted that settling outstanding debts is critical to improving liquidity in the sector, enhancing electricity generation, and attracting new investment.
Dr Joy Ogaji, CEO of the Association of Power Generation Companies, highlighted that thermal plants account for the bulk of the debts owed by government agencies. The repayment is expected to ensure more reliable power supply, benefiting households, industrial users, and commercial enterprises, while restoring investor confidence in Nigeria’s energy sector.
BVN Integration Reveals 45,000 Ghost Workers
The Federal Government’s integration of the Bank Verification Number (BVN) database with the federal payroll system has uncovered and removed 45,000 ghost workers from the national payroll. Former Finance Minister Kemi Adeosun explained that the initiative resolved previous inefficiencies in biometric verification and improved payroll accountability.
Permanent Secretaries were required to personally verify payroll data, creating a legal and procedural audit trail. Adeosun emphasized that technology alone is insufficient to prevent fraud; leadership commitment and ongoing oversight are equally critical. The removal of ghost workers is expected to improve government efficiency, free up resources for genuine employees, and enhance transparency in public sector payroll management.
Nigeria-Ghana Onion Trade Dispute
A trade dispute has emerged between Nigerian and Ghanaian onion traders, leading to a suspension of cross-border shipments. The National Onion Producers, Processors and Marketers Association of Nigeria (NOPPMAN) cited harassment and seizure of Nigerian trucks at Ghana’s Kotoku Market as the primary reasons for the halt.
Isa Aliyu, NOPPMAN President, announced that shipments would remain suspended until trader safety is ensured and lawful trading conditions are restored. The association urged intervention by both governments and regional bodies, including ECOWAS, to resolve the dispute. Traders highlighted that the incident disrupts regional food supply chains and threatens income stability for farmers and exporters on both sides of the border.
The trade dispute underscores ongoing challenges in cross-border agricultural commerce in West Africa, including regulatory inconsistencies, transport bottlenecks, and enforcement practices that undermine market efficiency.
SFS Real Estate Investment Trust Reports N4.1 Billion Profit
SFS Real Estate Investment Trust (REIT) reported a 762% increase in profit to N4.1 billion in 2025, marking strong growth in Nigeria’s real estate investment sector. The close-ended REIT pools resources from multiple investors to invest in high-potential property developments, offering attractive yields while diversifying risk.
The REIT’s strong performance reflects growing investor confidence in Nigeria’s property market, particularly in residential and commercial developments in Lagos, Abuja, and other key urban centres. Analysts expect continued demand for REITs as investors seek inflation-hedged, yield-generating investment options amid macroeconomic uncertainties.
SFS REIT’s expansion signals a broader recovery in the real estate sector, with potential for increased capital inflows, enhanced urban development, and job creation in construction and property management.