Market News

BY Oluwakemi Abimbola

Group Chief Economist and Managing Director of Research and Trade Intelligence at Afreximbank, Dr Yemi Kale, has stated that while the Nigerian economy is entering a phase of greater stability after years of turbulence, deep structural weaknesses continue to limit growth and prevent most citizens from reaping its benefits.

He said this on Tuesday at the FirstBank Nigeria Economic Outlook 2026 held under the theme ‘The Great Calibration: Mastering Resilience in an Era of Asynchronous Growth’.

Kale cautioned against mistaking stability for economic resolution. “We are in an era of stability, yes, but stability does not eliminate risk,” he said. “Stability is really just the first step. It creates the policy space needed for long-term planning and investment, but it does not resolve the deep structural issues that are persistent and well-documented in Nigeria.”

On inflation and monetary policy, Kale credited recent reforms for restoring credibility. “Nigeria is now clearly in a disinflation cycle,” he said. “The central bank kept monetary conditions tight long enough to re-anchor expectations across households and businesses. It was only after sustained improvements in the data that policy easing could even be discussed.” He added that the shift has been psychological as much as technical. “For the first time in years, Nigerians expect prices to stabilise. And once expectations shift, behaviour follows.”

Foreign exchange reforms, he said, have also begun to deliver tangible results.

“FX unification has improved transparency, narrowed arbitrage, and calmed speculative behaviour,” Kale noted. “Monthly FX volatility has dropped below four per cent, which signals a more functional and credible market and has helped attract portfolio inflows.”

Despite these gains, Kale stressed that growth remains fragile and uneve.

“Nigeria is diversified on paper, but not productively diversified,” he said. “We have many sectors, but too few of them deliver meaningful productivity or global competitiveness.”

He explained why headline growth often feels disconnected from lived experience: “You can grow GDP without any meaningful benefit to households or businesses. Money is spent, GDP rises, but if projects are incomplete or low impact, people rightly say they do not feel the growth.”

On public debt, Kale warned against complacency. “The issue for Nigeria is not the size of debt; it is affordability,” he said. “Debt accumulation has been growing faster than the economy, and interest costs are consuming a large share of government revenue.”

Looking ahead, Kale said sustaining reforms is Nigeria’s defining challenge. “If reforms are not sustained, all the gains of the past few years will be reversed,” he warned. “Stability has been achieved. The real test is whether we can hold the course long enough to translate growth into jobs, productivity, and better living standards.”

Speaking at the event, the Group Managing Director/Chief Executive Officer of FirstBank, Segun Alebiosu, affirmed that Nigeria’s economy has “turned the corner”, citing falling fuel and food prices, rising manufacturing activity and improving macroeconomic indicators as signs that the difficult phase of economic reforms is easing.

“We have seen the difficult part, and we’re seeing benefits. We have seen fuel prices going up; I mean, they went to N1,200 and back to N759 within the same economy. You see a bag of rice at N100,000, back to N66,000,” he said.

Alebiosu described the forum as a platform that had grown beyond an annual gathering to become “a trusted platform where insights meet influence. This is a forum that has become a defining platform for shaping ideas and direction in Nigeria’s economic journey. In a world of constant disruption, such clarity is not optional; it is essential.”

Alebiosu said the theme of the event reflected global realities of uneven growth and selective capital flows but stressed that economies that adapted early and built resilience deliberately often emerged stronger.

Despite currency adjustments, evolving services and global uncertainty, Alebiosu said Nigeria was showing signs of resilience across sectors: “These are not signs of fragility; they are signals of an economy repositioning itself.”

Addressing concerns around credit and investment, Alebiosu said improving macroeconomic conditions would support increased lending.

“With the improving economic environment, the inflation rates will be down, and with lower interest rates, lending will increase generally,” he said, adding that banks now had stronger balance sheets following recent recapitalisation.

“Banks have just capitalised, so they have liquidity, and they need to grow and also improve return on equity. The only thing we need to avoid is gambling, so that people don’t just go out there to throw out money just because they want to grow,” he cautioned.

He also urged Nigerians, especially those in the diaspora, to channel their funds into the domestic economy, arguing that returns on naira-denominated assets were more attractive.

“It does not make any sense to keep your money in foreign currency. Bring it to the country. The yield on naira assets far outpaces foreign currency assets. For people in the diaspora, the best thing is to send in their money, get value for it, get value for the asset, and make a good return for themselves. That is how growth will be fuelling the economy,” he added.

Alebiosu also highlighted growing manufacturing activity across the country as evidence of economic recovery.

“If you check places like the Lagos-Ibadan Expressway, you see manufacturing coming up. I have a power company client who told me he has 500 customers who consume electricity for manufacturing,” he said.

The bank MD also cited increased industrial activity in Agbara, Igbesa, Aba and Kano, noting the impact of decentralised power generation.

On the broader macroeconomic picture, Alebiosu said Nigeria now had a trade surplus, growing reserves and significant foreign portfolio inflows. “The total portfolio investors’ fund in the economy, the hot money, is about $10bn. If they decide to go today, we can pay them from the reserves, and we still won’t blink,” he said.

He expressed strong optimism about Nigeria’s growth trajectory, dismissing fears of political instability ahead of the 2026 election year, saying, “2026 is an election year. As we all expected, people say there will be an election crisis. There will be none. The economy is racing, and after the election, you will see accelerated growth, far higher than we have ever seen in this country.”

Alebiosu projected economic growth of between seven and 10 per cent, saying the focus should now be on accelerating reforms and sustaining momentum.

He added that FirstBank remained committed to supporting individuals and businesses with world-class banking services and innovative financial solutions as Nigeria navigates 2026.

During the panel discussion, the Deputy Managing Director, FirstBank Ghana, Osahon Ogieva, noted that the bank was prepared to support businesses in the country and was already doing so.

He said, “At First Bank, we are backing businesses that demonstrate they understand the opportunities in an emerging market like Nigeria. We are seeing companies in the FMCG space shrink pack sizes to adjust for purchasing power. Healthcare firms are doubling down on compliance and cold chain integrity. You can see this in major pharmaceutical supply systems,  medicines may be slightly more expensive, but when you go to a pharmacy like Med Plus, the medicines are better preserved and stored under reliable air conditioning. That is exactly the kind of operational discipline we are looking for.

“We are also seeing many logistics providers stepping up, specialising in all aspects of industrial complexes, whether providing power, trucking systems, or rail infrastructure. There are significant opportunities emerging in these areas, and we are supporting the companies that are seizing them. The most resilient clients are already executing bold, practical strategies. They are engineering working capital through careful accounting, reviewing contracts, and, in some industries, tying their pricing directly to supply contracts.”

He maintained that at First Bank, “we are not just observing these trends; we are actively sitting with our clients, providing real-time advisory support. We make available the bank’s intellectual capital to help our customers navigate the uncertainties of the emerging market environment. One of the most important takeaways from Dr. Kale’s intervention is the immense power and infrastructure required to operate in today’s AI-driven world, something we are beginning to factor into our strategy and client support.”