Market News

Federal Government is banking on sustained naira stability, lower food inflation and reduced business costs to accelerate Nigeria’s economic growth to 7 per cent, setting an ambitious target above the International Monetary Fund’s (IMF) projections of 4.3 per cent for 2026 and 4.4 per cent for 2027.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, revealed this at the closing press briefing of the 2026 IMF-World Bank Meetings in Bangkok, Thailand.

Oyedele said the government was addressing structural constraints affecting the economy, particularly food, energy and logistics costs, which have continued to fuel inflation and limit business expansion.

He expressed confidence that the government’s economic reform programme would deliver stronger growth and improve Nigeria’s standing among international investors.

He argued that the country’s economic prospects could surpass the multilateral lender’s forecasts, which he described as historically conservative, adding that ongoing policy interventions were designed to accelerate economic activity.

We expect growth that is much higher than what the IMF is projecting for Nigeria. Our target is to get to 7% growth rates,” he said.

Oyedele identified developments in the foreign exchange market as one of the factors supporting the improved economic outlook, arguing that the naira’s performance had helped ease some pressures on inflation.

A more stable exchange rate can reduce the naira cost of imported raw materials, machinery and other production inputs, potentially helping businesses manage operating expenses and moderate the prices of goods and services.

However, the minister acknowledged that domestic inflationary pressures remained a challenge, particularly those arising from food, energy and logistics costs.

According to him, addressing these constraints would be essential to reducing inflation and creating conditions for lower borrowing costs, which could encourage businesses to invest, expand production and generate employment.

He noted that the high cost of borrowing remained a major constraint on private-sector growth, highlighting the disparity between the expansion of some individual businesses and the broader economy.

“Imagine that prime lending is close to 30 per cent Your top business is growing at 30 per cent, and you are still growing at 4.5 per cent. Just imagine what is possible when they borrow at a single digit,” Oyedele said.

Lower lending rates, he suggested, could allow businesses to channel more resources into productive activities rather than servicing expensive loans.

Nevertheless, achieving single-digit lending rates would depend not only on lower inflation but also on monetary policy conditions, banks’ funding costs, credit risks and broader economic stability.

Beyond currency stability and inflation reduction, Oyedele pointed to the government’s tax overhaul as another pillar of its reform programme, saying the administration had rewritten Nigeria’s tax framework within two years.

He said the reforms were intended to strengthen economic management and establish a foundation for sustainable growth and shared prosperity.

“Everywhere you look, there’s an opportunity. But you need to look for the opportunity,” he said.

While the government remains optimistic about the economy’s prospects, achieving 7 per cent growth will depend on translating policy changes into measurable improvements in investment, productivity, employment and household purchasing power.