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Still brooding over the possibility of the economy surviving the next half year?

Oluwatosin Emmanuel Oladetan, an economic expert who sits atop Africa Plus Partners Nigeria Limited, holds a contrary view. 

He believes strongly that a lot will bode well for the economy in the coming months.

For context, Oladetan an accountant recalls that “Nigeria’s economy had a pretty good start to the year, with a 3.89% growth in the first quarter – its strongest in about ten years. This is especially notable since we are now looking at a more comprehensive picture of the economy, thanks to updated national accounts.

“The services sector was the main driver, making up 57.73% of the real output and growing by 4.31%, largely due to strong performances in information and communication technology and financial services. Agriculture also bounced back, growing 3.15% after being almost stagnant the previous year, and industry saw a 3.50% increase. What is interesting is that the non-oil sector accounted for a large share of 96.08% of the country’s real GDP, while oil, despite all the attention it gets, only made up 3.92%.

“The reform camp has a lot to be proud of, and one of their biggest achievements is the decrease in inflation. In June, the overall inflation rate went down to 15.91% percent, which is 2 basis points lower than the 15.93% in May 2026.

“If we look back, it is even more impressive – inflation has dropped by more than 10% compared to where it was a year ago. But what really matters to people is the price of food, and that has gone down too. In June 2025, food inflation was 25.41%, but now it is 17.52%.

“The core inflation rate, which is a better measure of the overall trend, is around 15.92%. Some of this change is because of the new way of calculating the consumer price index, which uses 2024 as a reference point and gives a more accurate picture of what people are actually buying. But a big part of it is real, and it is the result of the government’s efforts to keep prices under control and make sure supplies are steady. It is a delayed reward, but it is definitely something to celebrate.

“One thing that is really catching people off guard is what is happening with the currency. After losing up to 41.4% percent of its value in 2024, the naira actually gained about 11.8% in 2025, and it   added another 3.8% so far in 2026. By mid-July, it was trading at around N1,383 officially.

“What is really interesting is that the parallel market, which is often a better indicator of how people really feel about the economy, has gotten a lot closer to the official rate – it is now only about 3% different. This is a big deal, because just a year and a half ago, it seemed like a pipe dream that these two rates would ever converge.

“The governor of the Central Bank has been saying for a while now that there won’t be any devaluation, and for once, it looks like that is actually happening. The makeup of the money that came into the country is something we should think about. In Q1-2026, $10.37 billion capital came in, which is 83.83% more than the $5.64 billion foreign capital inflow in the similar period of Q1-2025. But $9.86 billion (95%), was from foreign investors who don’t necessarily have a long-term plan in the nation as they only intend to capture gains from the strong appreciation of the naira and opportunities in the money market. The kind of investment that builds factories, hires workers, and stays even when things get tough was very small, making up only 1.3% of the total capital inflow. The United Kingdom was responsible for about half of the money that came in, and the banking sector got almost 73% of the capital inflow. This is interesting because it shows that most of the money came from outside the country and went to the banks, rather than being used to build new things or create jobs. It is also worth noting that this kind of investment can be unpredictable and may not always be good for the country in the long run.

“The stock market had a remarkable run in the first half of the year. It started January at around 156,500 points and shot up to over 228,000 by June, which is a huge gain of nearly 46%. The total value of the market also grew significantly, from N99.94 trillion to N146.56 trillion, that is an increase of N46.6 trillion in just six months. At its peak in mid-May, the market reached an unprecedented N160 trillion and the index hit an all-time high above 250,000 points before investors started selling to lock in their profits.

“The Q1 2026 figures from the National Bureau of Statistics extend, almost seamlessly, the story I told about H1 2025. Total merchandise trade stood at N34.79 trillion in the first quarter, split between exports of N21.17 trillion, or 60.85%, and imports of N13.62 trillion, or 39.15%. The trade surplus came in at N7.54 trillion, a remarkable 340.88% higher than the N1.71 trillion of the preceding quarter. The country’s exports saw a significant increase, with a 2.77% rise in the first quarter of 2025 and an 11.63% jump in the fourth quarter of the same year. Crude oil accounted for a substantial portion of these exports, accounting for N11.20 trillion, which is equivalent to 52.92% of the country’s total exports. However, what is even more notable is the growth of non-crude exports, which reached N9.96 trillion, or 47.08% of the total. This shift towards a more diversified export base is a positive development, indicating that the economy is moving in the right direction, albeit with a still-narrow base that relies heavily on commodities like cocoa, cashew, urea, and gold, rather than value-added goods.

“The Honourable Minister of Agriculture clearly stated that Nigeria is still going to be bullish on the export of raw materials rather than scrapping it totally for value added goods which is a positive signal for the agricultural trade economics. On the other hand, the country’s imports declined sharply, with an 18.17% drop year-on-year and a 21.05% decrease quarter-on-quarter. 

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“On the positive side, crude oil production reached its highest level since April 2020, at about 1.56 million barrels per day in June. When you add in the 0.2 million barrels of condensate, the total production was around 1.76 million barrels per day, which is above the quota set by OPEC and higher than the average for 2021-2024. This was largely due to improved security for pipelines and a real decrease in oil theft, which had a bigger impact than years of trying to address the issue. Additionally, oil prices were favorable, with Nigerian crude averaging around $71.63 per barrel for the first half of the year, which is above the budget benchmark. The government also offered Shell a tax credit of $11.50 per barrel for the Bonga expansion project, which should help keep investment coming in.

Overall, it was a good start to the year for the oil and gas sector, but there are still policy challenges to be addressed.

“The government’s goal of having a one-trillion-dollar economy by 2030. I’m not questioning their ambition, but I do have doubts about the numbers. If our economy is growing at 3.89% and might reach 4.1% to 4.6% by the end of the year, it is hard to see how we will become a trillion-dollar economy in just four years without experiencing double-digit growth, which is something Nigeria has never been able to sustain. 

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The consensus among the serious forecasters is cautiously bullish, and I broadly share it. Most scholars projected that the GDP growth should be between 4.1% – 4.5%, inflation easing around the corridor of 15.0%, the policy rate edging down to 26.00% with room to cut further in Q4-2026, the naira around N1,400 to the dollar, crude near $76.54, oil production above 1.7 million barrels-per-day and reserves rising toward $53.00 billion. The direction of travel, across scholars’ publications and analysts’ deduction is a positive outlook.

“Nigeria enters the second half of 2026 in the best macroeconomic shape it has been in for years, and it would be churlish to pretend otherwise. Growth is up, inflation is down, the naira is firm, the reserves are full, the market is buoyant and the revenue is pouring in. The reform thesis, so painful in 2023 and so unconvincing in 2024, is finally posting the kind of numbers its defenders always insisted were coming. Anyone reviewing the scoreboard alone would call this a comfortable lead.”