Market News

written by Bamidele Ogunwusi 

Nigeria could enter 2026 on its strongest economic footing in more than a decade, according to leading economist Bismarck Rewane, who forecasts that a combination of easing inflation, rising investment, major corporate listings and stabilising monetary conditions will propel the country into a new and more durable cycle of growth.

Presenting his projections at the  Parthian Economic Discourse 2025 in Lagos on Thursday, Rewane describes 2026 as a defining year in which structural reforms, private-sector expansion and improved policy coordination converge to reposition Africa’s largest economy for a significant turnaround.

Rewane’s analysis points to a pivotal shift driven by the reorganisation of key sectors — manufacturing, banking, technology, telecoms, the creative industry and real estate — under more favourable macroeconomic conditions. 

He argues that after years of unstable inflation, exchange-rate distortions and suppressed investment, Nigeria is finally approaching an economic juncture where fundamentals and reform momentum can reinforce each other rather than work in conflict.

A central pillar of his forecast is an explosive expansion of the capital market. Rewane projects that the Nigerian Exchange’s total market capitalisation could jump to N262 trillion in 2026, up sharply from the current N90 trillion — a staggering 191% surge. 

At that level, he notes, the market would represent 72% of Nigeria’s projected GDP, placing it among the fastest-expanding markets in the emerging-economies universe. 

He attributes the coming expansion to anticipated listings of mega corporates, including the Dangote Refinery and the Nigerian National Petroleum Company (NNPC), alongside accelerating profitability across sectors such as telecoms, cement, consumer goods and banking. 

According to him, investor sentiment is already shifting due to improving FX stability, sustained disinflation and stronger earnings guidance from top-tier companies. 

He maintains that Nigeria’s equity market is entering a new cycle powered by corporate expansion, regulatory reforms and the return of long-delayed market-moving listings.

Rewane also forecasts a significant easing of inflation in 2026, describing it as one of the most important pivot points for Nigeria’s recovery. 

He expects food and core inflation to fall to around 20%, driven by a firm disinflationary stance by the Central Bank of Nigeria (CBN), improvements in domestic refining capacity that will reduce volatility in fuel prices, stronger manufacturing output, rising productivity, and reforms aimed at lowering logistics and supply-chain costs. 

With inflation easing, he predicts an improvement in household purchasing power, which will in turn stimulate demand across retail, services and industrial sectors.

On monetary policy, Rewane emphasises that 2026 will likely mark the beginning of cautious interest-rate cuts by the CBN after nearly two years of aggressive tightening. However, he warns that the apex bank will move slowly and conditionally. 

He argues that the CBN must first be convinced of sustained disinflation, improved liquidity control through robust CRR and liquidity-ratio management, more efficient FX market operations, strengthened reserves, and credible fiscal consolidation with reduced deficit financing. In his view, monetary authorities will be navigating a delicate balance — cutting too soon could reignite inflationary pressures, while cutting too late risks suppressing the investment momentum that Nigeria urgently needs.

Rewane predicts a more stable and stronger Naira in 2026, projecting that the exchange rate will appreciate and stabilise within the N1450 to N1500 per dollar band. 

He expects this outcome to be supported by higher oil production and export earnings, improved FX supply from rising reserves, policy reforms that reduce arbitrage and speculation, favourable inflation-interest differentials that attract capital flows, and a moderation in import demand due to fiscal and trade measures. 

He stresses that sustained exchange-rate stability will be central to investor confidence, business planning and macroeconomic predictability.

On overall economic performance, Rewane forecasts Nigeria’s GDP growth to rise to 4.1% in 2026, driven by expanding business activity, infrastructure improvements, industrial-policy execution, stronger private-sector credit, better trade flows and higher domestic value addition. He notes that consumption — which has been heavily eroded by inflation — is expected to recover gradually, while investment spending will be supported by strong government-bond issuance and public infrastructure expansion.

Rewane identifies six industries he believes will shape Nigeria’s economic direction in 2026: agriculture and agro-processing with projected earnings of N104.6 trillion; real estate and construction with N72.41 trillion; telecommunications with N41.07 trillion; manufacturing with N38.25 trillion; the creative economy with N7.23 trillion; and technology and fintech with N2.97 trillion. 

He noted that each of these sectors is undergoing its own structural transformation driven by demographic pressure, digital expansion, urbanisation, regional trade integration and the broader macroeconomic adjustment.

Corporate earnings, according to Rewane, will be one of the strongest indicators of renewed economic vitality next year. 

He highlights MTN Nigeria and Dangote Cement as standout performers. MTN is projected to see Q1 2026 revenue rise to N1.7 trillion and Q2 revenue to N2.22 trillion, driven by data-led growth, cost efficiency and tariff adjustments. 

Dangote Cement is expected to post Q1 2026 revenue of N1.3 trillion and Q2 revenue of N1.37 trillion, with profit after tax in Q2 jumping by more than 100% to N628 billion, boosted by clinker exports, infrastructure demand and regional expansion. He argues that strong corporate results will play a critical role in sustaining investor confidence and driving market capitalisation higher.

Rewane expects Nigeria’s banking sector to enter 2026 with strengthened stability indicators, helped by moderating inflation, reduced FX exposure as the naira stabilises, improved digital banking penetration, increased sector diversification, and stronger capital buffers following the recapitalisation exercise. 

He predicted that the sector will be led by large universal banks with strong balance sheets, digital-first institutions and fintechs that continue to disrupt retail payments and SME finance.

On pensions, he projects that funds will experience short-term volatility at the start of 2026 due to global and domestic shocks but will recover strongly by year-end, with net asset value expected to rise 12–15% as liquidity improves and political risk fades. He expects domestic equities and government securities to outperform as confidence returns.

However, Rewane underscores that Nigeria’s outlook will not be insulated from global turbulence. 

He warns that geopolitical tensions, moderating commodity prices, potential declines in cocoa and other key exports, fragile global growth and shifts in global energy markets could affect Nigeria’s fiscal and market stability. 

Domestically, he identifies four major risks that could upset the projections: oil prices falling below $60 per barrel, worsening insecurity in food-producing states, excessive election-year spending in 2026, and a sharp decline in global commodity prices if geopolitical tensions ease.

Ultimately, Rewane concludes that 2026 will be a year in which Nigeria’s economic direction is determined by the quality of policy choices, the discipline of fiscal and monetary authorities, and the country’s ability to secure its productive regions. 

In his words, Nigeria is “standing at the threshold of a profound economic reset,” with the potential either to accelerate into a new era of stability and growth or stumble at the edge of transformation if reforms stall.

While welcoming participants at the event, Group Managing Director of Parthian Capital, Oluseye Olusoga, said Nigeria should take charge of the country and not leave it only to the government. 

He said, “Security is not a job only for the government. It should be our own job too. Without security, investment won’t flow”.