There is no gainsaying the current macroeconomic realities on the ground, which have tempered the high expectations for Nigeria’s economic growth in 2026.
Ordinarily, economic growth, in its real sense, should positively impact households through improved living standards, price stability, employment generation, reduced import dependency, increased productivity, and other developmental outcomes. Unfortunately, the Nigerian experience remains different, given the prevailing harsh economic conditions and high cost of living.
However, there is little doubt that several projections on Nigeria’s economy suggest an upward growth trajectory in 2026, despite the fact that the year is expected to witness intense pre-election campaigns and heightened political activities.
Notwithstanding these concerns, Nigeria’s economy recorded a strong GDP growth rate of 3.89% in the first quarter of 2026, demonstrating the resilience of the non-oil sector. The services sector led the growth performance with significant contributions from various sectors and sub-sectors. Likewise, the agricultural sector recorded a notable recovery, growing by 3.15% compared to its previous weak performance, which many analysts had largely attributed to insecurity across the country.
Nevertheless, the build-up to the 2027 general elections may cast a shadow over economic activities, potentially slowing business confidence and limiting investment, trade, and other productive activities.
It is also important not to overlook the ongoing geopolitical tensions in the Middle East, particularly the US-Iran conflict, whose impact on global crude oil prices has translated into higher energy costs and significant disruptions within the fertilizer supply value chain. Although this crisis presents challenges globally, it could also serve as a disguised blessing for Nigeria through increased oil revenues accruing to government coffers.
Interestingly, recent economic reforms undertaken by the Nigerian government are expected to begin yielding tangible benefits. These reforms are complemented by the recently concluded banking sector recapitalization exercise, while reforms within the insurance and capital market sectors are still ongoing.
In this regard, several key sectors possess significant potential to drive economic growth. These include banking, the capital market, oil and gas, telecommunications, real estate and construction, agriculture, manufacturing, import and export trade, mining, the creative industry, as well as diaspora remittances, which continue to strengthen Nigeria’s external reserves through the Central Bank of Nigeria (CBN).
Furthermore, the implementation of the 2026 national budget, particularly through capital expenditure and infrastructure spending, is expected to provide fiscal stimulus to the economy and support growth.
In addition, political campaign spending ahead of the 2027 elections is likely to stimulate activities in selected sectors of the economy, including printing, media advertising, event management, transportation, hospitality, and the production of political souvenirs.
Taken together, these factors will significantly shape the trajectory of Nigeria’s economic growth and development in 2026 and beyond.
The linkage between economic growth and a steady electricity power supply is the foundation of industrialization. It is what has driven the remarkable economic growth that many developed nations enjoy today.
Steady power generation and its efficient utilization remain at the heart of modern economic stability and advancement. Unfortunately, as a nation, we are still grappling with perennial power challenges. This is not merely a recent issue but the result of decades of failure to fully appreciate the economic growth potential and strategic importance of steady, uninterrupted, and reliable power generation.
Despite an installed generation capacity of about 16,000 megawatts and the availability of various sources of power generation, including hydro, thermal, and renewable energy, the country is still unable to meet its growing electricity demand.
Therefore, for Nigeria to achieve sustainable economic growth and industrial development, there must be significant improvements in power generation, transmission, and distribution across the electricity value chain.
The recent reforms in the power sector are particularly critical at this stage of the country’s development. Through these reforms, greater liberalization of the sector is expected, alongside increased private-sector participation and investment, the closing of funding gaps, and the strengthening of technical and managerial capacity.
The reforms are also expected to address the issues surrounding cost-reflective tariffs and the persistent metering challenges that continue to affect electricity consumers across the country.
From a political economy perspective, the success of Nigeria’s economic growth ambitions will depend largely on the ability of policymakers to sustain reforms, improve infrastructure, strengthen institutions, and ensure a reliable electricity supply capable of supporting industrialization, productivity, and long-term economic competitiveness.
Adefolarin A.Olamiekan
Political Economists
Host of The Market Report show
