Market News

Multinational professional services network, PricewaterhouseCoopers, also known as (PwC) has projected Nigeria’s real gross domestic product (GDP) growth by 4.3per cent in in the second half (H2) 2026 supported by higher crude oil production and stronger performance in dominant sectors. 

“Nigeria’s economic outlook remains positive, although the second half of the year will continue to be shaped by domestic and external risks. Real GDP growth is projected at 4.3% for 2026, supported by higher crude oil production and stronger performance in dominant sectors. Inflation is expected to moderate, although food-price pressures, other supply-side shocks and pre-election spending could create upside risks,” PwC’s latest Economic Outlook released yesterday noted.

It said the naira is expected to remain broadly stable, supported by improved external buffers and foreign-exchange market reforms, but it remains exposed to shifts in oil prices, capital flows and domestic FX demand. Monetary policy is expected to remain relatively tight, with room for gradual rate reductions if the decline in inflation is sustained. Fiscal pressures may also persist as continued spending needs, the budget deficit, and government financing requirements place demands on available resources.

“The central task for Nigeria in H2 2026 is therefore not simply to preserve macroeconomic stability. It is to make that stability work more effectively for households and businesses. Progress will depend on lowering essential costs, expanding access to finance, improving infrastructure and productivity, and converting stronger investor interest into productive investment and jobs. 

“Successfully navigating this next phase would allow Nigeria to move beyond stabilisation and begin unlocking the broader reform dividend through stronger incomes, improved welfare and more inclusive economic growth,” it said.

According to its latest Economic Outlook released yesterday, PwC said fiscal pressures may persist in H2 2026, driven by continued spending needs, a persistent budget deficit and elevated government financing requirements.

In its bullet highlight of the report on exchange rate outlook, it said: “The naira is expected to remain broadly stable but susceptible to volatility from global oil prices, capital flows and domestic foreign exchange demand conditions.”

On interest rate outlook, it said the Central Bank of Nigeria (CBN) is expected to maintain a tight monetary policy stance, with scope for gradual rate cuts if the decline in inflation is sustained. 

Co-authored by Partner, Chief Economist and Lead, Strategy& West Africa, Olusegun Zaccheaus;  Partner, and Clients & Market Leader, West Market, Pedro Omontuemhen;  Director, Akolawole Odunlami; and  Manager / Lead Economist, Adesola Borokini, PhD, the report also examined the performance of the first six months of the economy,

According to PwC, economic activity remained resilient in the first half of the year, but the pattern of growth was uneven.

“GDP growth in Q1 was driven by stronger activity in ICT, Finance & Insurance, Construction and Agriculture. At the same time, the PMI weakened during the second quarter, recovering only marginally to 50.1 in June. Agriculture remained in expansion, while industry, services and new orders were below the 50-point threshold. Seventeen of the 36 subsectors tracked were in contraction, highlighting the continued pressure on parts of the real economy,” noted the report.

Foreign exchange conditions, it said, strengthened, there was improved official-market liquidity, and larger external buffers supported naira stability, while capital importation rose to $10.37 billion in Q1 2026. “Yet the composition of these flows remain important. Foreign portfolio investment accounted for $9.86 billion, or 95.1per cent of total capital inflows, while FDI (foreign direct investment) accounted for only 1.3per cent. This underscores the need to convert improved investor confidence into longer-term investment in productive assets, businesses, and infrastructure.

“Fiscal revenue also strengthened, although execution pressures remain. Total distributable FAAC revenue rose to N2.55 trillion in June, supported by stronger statutory revenue and VAT collections. At the same time, revenue performance against budget targets has been uneven, while continued spending requirements, government borrowing, and overlapping budget cycles may constrain fiscal flexibility and the pace of capital-project delivery.

“For households, improvements in headline inflation have provided limited relief. Food inflation rose to 17.52per cent in June, while the cost of a healthy diet reached N1,589 per adult per day in April. Buying conditions for consumer durables, vehicles, and property also remained weak; reflecting the continued pressure of essential spending on household budgets,” PwC said in the H1 2026 outlook.