Feature/OPED
Why 2026 Must Be the Year Nigeria’s Economy Works for All
By Blaise Udunze
As the new economic year begins in Nigeria, statements and policies emanating from government officials’ corridors project cautious optimism. One of the official narratives that expresses renewal of hope and confidence is the projection from the Central Bank of Nigeria (CBN) that the economy is expected to continue expanding, with GDP growth at 4.49 percent, and headline inflation is projected to moderate to 12.9 percent. Despite grappling with shrinking oil revenues, rising public debt, and widening fiscal deficits as a nation, it is further projected that the foreign reserves are anticipated to exceed $50 billion. Policymakers presented these figures as evidence that the economy is stabilising and consolidating, irrespective of the clear evidence of years of turbulence.
Yet the concern for experts is that beyond the polished macroeconomic indicators lies a widening disconnect between statistical recovery and lived reality. While increasingly warning that stability is necessary, the views across academia, civil society, labour groups, and the private sector, experts clearly stated that it is not synonymous with sustainable growth, nor does it automatically improve living standards for millions of Nigerians grappling with unemployment, rising prices, and fragile livelihoods.
This development signals the economic debate entering 2026, as evident in the previous years, the argument that the year must not become another chapter in which rhetoric outpaces results. To them, it must place productivity, inclusion, and welfare at the heart of reform as all this must be informed via a decisive shift toward holistic, people-centered economic renewal.
The Numbers and the Narrative
There is no denying that certain macroeconomic indicators have improved. Tighter monetary policy in 2025, foreign exchange market unification, and efforts to rein in deficit financing have contributed to relative stability in inflation dynamics and exchange rate volatility.
However, economists interviewed by major national dailies argue that many of these gains remain largely “on paper.” They clearly stated that growth figures have not translated into broad-based job creation, rising real incomes, or improved business conditions for small enterprises. It is regrettable that households whose spending is dominated by food, transport, and energy, whilst inflation. However, easing remains painfully high relative to income, and this disconnect underscores a deeper flaw in economic communication and design, showing that headline indicators often mask structural weaknesses. GDP growth does not automatically reflect productivity expansion, employment quality, or resilience. Foreign reserves alone do not guarantee the affordability of necessities. When policy emphasis centres on aggregates rather than outcomes, reform risks losing social legitimacy.
When Stability Isn’t Enough
The inflation debate illustrates this dilemma clearly, and projections suggest moderation in 2026, yet prices of essential goods remain high. Low-income households, especially those outside formal wage employment, bear a disproportionate burden. For them, “disinflation” offers little relief when purchasing power has already been eroded. In like manner, exchange rate unification, though economically rational, imposed short-term shocks on import-dependent businesses and consumers. The fact remains that without a simultaneous and aggressive push to strengthen domestic production, the nation’s currency reforms risk transferring adjustment costs to households rather than building long-term competitiveness. These debates reveal two competing visions of economic management:
– One that prioritises macroeconomic order and investor confidence
– Another that insists stability must be matched by visible improvements in welfare, productivity, and opportunity.
The fact is that a holistic renewal agenda must reconcile both.
Macroeconomic Stability as Foundation, Not Destination
To be clear, stability matters, and it must be treated as a foundation, not the finish line. One will conclude that this is what it is meant to be because economic planning becomes impossible without disciplined fiscal management, credible monetary policy, and sustainable debt dynamics. Experts caution against celebrating stabilisation while growth remains modest.
The International Monetary Fund projects Nigeria’s growth to slow toward three per cent, with further moderation in 2026 due largely to weaker global demand and declining oil prices. Crude oil’s fall below Nigeria’s budget benchmark reinforces the urgency of diversification. Moderate growth, without deep structural reform, cannot absorb Nigeria’s rapidly expanding labour force. This is because as a young, fast-growing population requires productivity-led growth, not cyclical rebounds tied to commodity prices.
Infrastructure as the Productivity Multiplier
Infrastructure remains one of Nigeria’s most binding constraints, commonly associated with the lingering erratic power supply, congested transport corridors, inefficient ports, and weak digital connectivity, which impose high costs on businesses and households alike.
Consistently, it is argued by experts that fragmented projects are insufficient by objectively looking at the trend of things; what is required is integrated infrastructure planning that links energy reform with transport logistics, industrial clusters, rural access roads, and digital platforms. Some of the key grey areas that the electricity reform must address are not just generation but transmission losses, distribution inefficiencies, and tariff credibility. Without much ado, transport investments should prioritise economic corridors and channels that connect farms to markets and factories to ports. Digital infrastructure, broadband access, data systems, and digital public services must be recognised as essential economic infrastructure, not optional upgrades.
Human Capital and the Missing Engine of Growth
No economy can sustainably outgrow the quality of its people. Yet education and healthcare often remain peripheral in reform discourse.
Today, we noticed that Nigeria’s education system struggles with skill mismatches, while healthcare costs push millions into poverty.
Economic growth, no matter how well-measured, will remain shallow, as experts have maintained in their arguments that this will remain a constant factor without human capital reform. In the same manner, education, which is a key instrument for building human capital, must be in alignment with labour-market needs, while reflecting technical skills, digital literacy, and adaptability, knowing quite well that vocational and technical are critical and should be elevated as engines of productivity, not treated as second-tier options. Human capital is not social expenditure; it is economic investment, so for this reason, healthcare investment, like others, must prioritise preventive care, insurance coverage, and workforce retention.
Private Sector and MSMEs, From Constraint to Catalyst
Small and medium-sized enterprises are already struggling to survive in Nigeria’s high-cost economy, despite being the nation’s largest employer of labour, as informed by high interest rates, limited credit access, regulatory uncertainty, and infrastructure bottlenecks.
Access to affordable finance, regulatory simplicity, predictable tax policy, and contract enforcement are critical since experts repeatedly stress that reform must shift from controlling enterprise to enabling it.
Without deliberate support for small businesses, growth remains concentrated, informal employment persists, and inequality deepens. For these reasons, MSMEs require not just credit, but stable operating environments.
Industrialisation, Local Production, and Value Addition
One of the strongest expert warnings ahead of 2026 concerns Nigeria’s continued reliance on imports and raw commodity exports. This structure leaves the economy exposed to external shocks and foreign exchange volatility. For this reason, we have continued to witness economists and industry leaders advocating aggressive support for local production, agro-processing, and manufacturing value chains. Strengthening domestic capacity reduces import dependence, stabilises foreign exchange demand, and creates jobs.
Industrial policy must practically focus on sectors where Nigeria has a comparative advantage, supported by infrastructure, skills, and finance. This is to say that import substitution without competitiveness risks inefficiency, and value addition with productivity creates resilience.
Fiscal Reform and Social Justice
Fiscal reform is very important, and experts have argued that to make sure that fiscal reform is done in a fair way, it must be equitable. The tax officials must ensure that extending the tax base, it does not translate into overburdening small businesses or low-income earners. Also, one would have noticed that the removal of fuel subsidies freed fiscal space, but without strong social safety nets, it also made life very tough for a lot of people because they did not have any help when they needed it. Critics argue that reform savings must be visibly social investments like education, healthcare, transport, and targeted welfare. Social protection is not charity; it is economic stabilisation, preventing reform shocks from eroding social cohesion.
Governance, Institutions, and Policy Credibility
Unique to the Nigerian system, we have witnessed economic reforms fail where institutions are weak. This is because trust and investment have been undermined due to Policy reversals, regulatory inconsistency, and the lack of transparent decision-making.
Beyond rhetoric to enforcement, experts emphasise the need for policy coherence, institutional professionalism, and transparent communication. Anti-corruption efforts must extend. Prolonged Judicial judgement, particularly in commercial dispute resolution, has adversely impeded the smooth running of society as it questions the credibility of the system. Good governance is not abstract morality, rather it is a growth multiplier.
Agriculture, Food Security, and Rural Stability
Food inflation remains a major driver of hardship and has been one of Nigeria’s most stubborn. Though trade liberalisation has occasionally eased prices, experts argue that without boosting domestic agricultural productivity, food security will remain fragile.
Mechanisation, storage infrastructure, rural roads, insurance, and access to finance are essential. Equally critical is addressing rural insecurity, which disrupts production and inflates food prices.
Agriculture links economic growth directly to poverty reduction and social stability.
Digital Economy and Innovation
Technology is no longer a sector; it is a layer across all sectors. One can argue that Nigeria’s fintech success demonstrates what is possible, but looking at it intently, a broader digital transformation requires investment in connectivity, data protection, and cybersecurity. Regulation must be enabling, must be able to change when necessary, and forward-looking to achieve a thriving digital economy that can generate jobs, improve service delivery, and connect local firms to global markets.
The Productivity Challenge in Decline
Across expert critiques, one theme recurs: stability without productivity is stagnation.
An economy can be stable yet unproductive, grow slowly, create little or no jobs, and remain vulnerable to shocks. Productivity growth transforms stability into prosperity. It requires investment in people, infrastructure, innovation, and institutions.
Without productivity, growth becomes cyclical, driven by oil prices, not by domestic capacity.
From Rhetoric to Resonance: Closing the Credibility Gap
As Nigeria enters 2026, it has to choose to either settle for modest stability and make progress or pursue bold, people-centred strategies that generate shared prosperity.
The signs of stabilisation are real. But so is the urgency for deeper reforms that trickles down to the daily lives of those at the lower rung. Growth must be measured not only in GDP figures, inflation rates, or reserves, but in the number of jobs that are being created, the people who are earning money, and the businesses that are still running, with hope restored. It is expected that a true economic renewal in 2026 will not be announced; it will be felt.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
By Blaise Udunze
Daily, the world watches Nigeria through a familiar lens in what appears to be a gory situation. Especially in cases when the news headlines tell stories of farmer-herder clashes, bandit attacks, kidnappings, villages reduced to ashes or deserted by the dwellers, as thousands of Nigerians have been displaced across states such as Zamfara, Plateau, Benue, Niger, Kaduna and Nasarawa. Subliminally, this is about to become a similarly ugly occurrence in southwestern Nigeria, which is fast becoming obvious if not nipped in the bud quickly.
Recorded data have shown that bandits, Boko Haram, and others killed over 190,000 Nigerians in 17 years and displaced 3.7 million people.
A human rights organisation, the International Society for Civil Liberties and Rule of Law (Intersociety), in its fearful revelation, has said that no fewer than 190,150 Nigerians have been killed by bandits, Boko Haram insurgents, and suspected armed herdsmen between July 2009 and March 19, 2026, as this calls for concern.
The dominant explanations often point to ethnic tensions, religious divisions, climate change, shrinking grazing routes or weak security institutions. No doubt, those factors are certainly part of Nigeria’s complex security crisis. Yet another question deserves serious examination.
What if, in some locations, the violence is also serving another purpose? What if some of the territories experiencing repeated displacement are the same places sitting atop some of Nigeria’s most valuable mineral deposits? More importantly, if such a pattern exists, who benefits when communities disappear?
Of a truth, these questions are uncomfortable, but undeniably they deserve careful investigation rather than dismissal.
For ages, Nigeria has been naturally endowed, and it is estimated to be rich in enormous significant reserves of gold, lithium, uranium, tin, columbite and other strategic minerals increasingly sought after in the global transition to clean energy technologies. As international demand for battery minerals continues to rise, these resources have become far more valuable than they were only a decade ago.
If one overlays publicly available geological information with maps showing persistent violence, some observers argue that striking geographical overlaps appear in several regions. Such overlaps alone cannot establish causation. Correlation is not proof of conspiracy. However, they raise questions worthy of independent scrutiny.
One issue attracting increasing attention and adequately yearns for answer is whether prolonged insecurity may inadvertently or deliberately create conditions that make mineral extraction easier.
Under Nigeria’s Nigerian Minerals and Mining Act 2007, mineral resources belong to the Federal Government, while mining rights are granted through licences and leases. Community engagement and land access are expected to form part of the licensing process, although implementation varies depending on circumstances. This raises an important policy question.
What happens when the communities expected to participate in those processes have already fled because of violence?
Displacement changes the dynamics of land ownership, consent and access. While no evidence automatically proves that attacks are orchestrated to facilitate mining, the sequence of violence followed by renewed commercial activity in some locations deserves closer examination by regulators, lawmakers and investigative journalists.
In conflict studies, researchers have long observed that wars often generate economic winners alongside humanitarian losers. Could elements of Nigeria’s insecurity also be producing economic beneficiaries?
Reports over the years have documented concerns about illegal mining operations across parts of northern Nigeria. Government agencies themselves have repeatedly acknowledged that criminal networks profit from the country’s vast mineral wealth. The unresolved question is whether isolated criminality has, in some instances, evolved into more sophisticated alliances involving political influence, financial interests and international supply chains. If so, the implications extend far beyond Nigeria.
Invariably, it is clearly known that lithium has become one of the world’s most strategic commodities, powering electric vehicle batteries and renewable energy storage systems. Gold has always remained one of the safest global investment assets during periods of uncertainty. Meanwhile, it is well confirmed that the global appetite for these minerals creates enormous financial incentives.
Suppose violent displacement reduces resistance to extraction. Suppose shell companies subsequently acquire mining interests. Suppose minerals then leave Nigeria through legitimate-looking export documentation while their true value remains understated.
These scenarios remain allegations unless supported by verifiable evidence. Yet they outline a framework that investigators may wish to test rather than ignore. Financial crime experts frequently identify trade mis-invoicing as one of the most common methods of illicit financial flows worldwide.
Could Nigeria’s solid minerals sector be vulnerable to similar practices? If valuable lithium ore is deliberately but inaccurately described as lower-value material on export documents, substantial wealth could potentially leave the country without reflecting its true market value. Likewise, if unrefined gold exits through privileged channels with limited scrutiny, questions naturally arise about oversight, transparency and accountability over criminal activities which have continued to stunt and disrupt the country’s socio-economic growth and at the same time cause carnage.
Such possibilities are not accusations against any particular institution or company. Rather, they illustrate why stronger monitoring systems are increasingly essential. Another question concerns logistics.
With the high level of criminal activities, industrial mining requires heavy machinery, diesel supplies, transportation networks and specialised personnel. These are not operations that can remain invisible indefinitely.
If certain territories are genuinely too dangerous for security agencies, how do industrial-scale extraction activities reportedly continue in some remote locations? If they do, who protects those operations? Who authorises their movement? Who verifies what is extracted? Who ensures royalties and export revenues reach public coffers? These are governance questions that demand institutional answers.
Equally important is the international dimension. Minerals extracted in Nigeria ultimately enter global supply chains. Gold may pass through international refining hubs before entering financial markets. Lithium may become part of battery manufacturing destined for electric vehicles, which are being sold across Europe, North America and Asia.
One known fact is that consumers purchasing products containing these minerals rarely know the full story of where they originated.
Increasingly, however, investors and governments are demanding ethical sourcing standards that trace minerals from extraction to final manufacture.
A critical factor that must be taken into cognisance is that if insecurity is creating opportunities for illegal or unethical extraction anywhere in the world, multinational companies have responsibilities alongside national governments, of which the onus falls on the Nigerian government.
Transparency cannot stop at the mine gate. Nor should accountability end at national borders. Another issue requiring attention concerns beneficial ownership.
Across many jurisdictions, shell companies can obscure the identities of individuals ultimately controlling commercial assets. If politically exposed persons or powerful business interests are hidden behind complex corporate structures registered offshore, identifying beneficiaries becomes significantly more difficult. This challenge is hardly unique to Nigeria.
Findings showed that from Latin America to Central Africa and Southeast Asia, resistant corporate networks have frequently complicated efforts to combat corruption and illicit resource extraction. That is precisely why open corporate registries, beneficial ownership databases and transparent mining licence disclosures are becoming global governance priorities. For Nigeria, the stakes could hardly be higher.
The country stands at the centre of the world’s emerging critical minerals economy. The Nigerian government can’t feign ignorance of the fact that, when handled transparently, these resources could finance infrastructure, education, healthcare, and industrial development for generations.
In no way would the government claim not knowing that when handled poorly, they risk becoming another chapter in the well-documented “resource curse,” where extraordinary natural wealth coincides with persistent poverty, insecurity and institutional weakness.
The ultimate challenge, therefore, is not simply about mining. It is about governance. It is about whether public institutions possess both the independence and capacity to ensure that natural resources benefit citizens rather than narrow interests. It is about whether conflict zones receive genuine peacebuilding efforts instead of becoming forgotten frontiers. And it is about whether international markets demand accountability with the same enthusiasm they demand raw materials.
None of these questions should be answered through speculation. They require rigorous investigations, forensic financial analysis, satellite imagery, mining license audits, customs records, beneficial ownership disclosures and courageous journalism.
They require governments willing to open their books. They require international cooperation capable of tracing money across borders. Most importantly, they require asking questions that have too often remained unasked.
Perhaps Nigeria’s security crisis is exactly what it appears to be: a tragic convergence of historical grievances, weak institutions, criminality and environmental pressures. Or perhaps, in some places, another layer of economic incentive deserves closer scrutiny.
Until those questions are thoroughly investigated, one possibility will continue to linger. Maybe the world’s attention has been fixed on the blood spilt above ground, while too little attention has been paid to the extraordinary wealth lying beneath it.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: bl***********@***il.com
Feature/OPED
What Does Nigeria’s $51bn Reserves Milestone Mean if Most New Foreign Money Can Leave Quickly?
Nigeria’s foreign reserves have climbed to about $51 billion, a decade-plus high, according to the Central Bank of Nigeria (CBN). EBC Financial Group (EBC) notes that this reflects stronger investor confidence, but the second half may show whether it holds, as the build rests on three cyclical drivers: oil earnings, short-term foreign money and a narrowing official-to-street naira gap.
Reserves rose from about $32 billion in April 2024, during a dollar shortage, to about $51 billion now, near the CBN’s target. Much came from two cyclical sources, strong oil earnings and money chasing high-yielding naira assets, so EBC expects the pace to slow or reverse. Fitch Ratings, a major international credit rating agency, expects a marginal decline to about $47 billion by the end of 2026, citing higher spending and external pressures.
David Precious, Senior Market Analyst at EBC Financial Group, said, “Nigeria’s reserve build is real but may not be durable yet, because nearly all of the new money is the kind that can leave quickly. Of the $10.37 billion that came in over the first quarter, the overwhelming majority was short-term portfolio funds rather than long-term investment, so a shift in oil prices, global interest rates or confidence in the naira might pull a large part of it straight back out.”
Most New Money Can Still Leave Quickly
The composition of the foreign inflows explains the caution over how long the build can last. The country attracted $10.37 billion in foreign investment in the first quarter of 2026, up 83.83 per cent year-on-year, according to the National Bureau of Statistics (NBS). Of that, $9.86 billion or 95.09 per cent, was portfolio money, largely short-term naira debt such as Treasury bills that investors can sell at the next auction, while foreign direct investment, the long-term kind that builds factories and jobs, was $135.08 million, or 1.30 per cent. Put simply, of each dollar coming in, about 95 cents can leave quickly, and barely one cent stays.
That money supports reserves while it stays. Dollars brought in to buy naira assets add to market supply, letting the CBN hold more reserves and steady the naira. It leaves when conditions change. Nigeria earns most of its export dollars from oil and gas, so lower oil prices mean fewer dollars, and as a member of the Organisation of the Petroleum Exporting Countries (OPEC), it cannot simply produce more, output capped by quota and reduced by theft and ageing fields. Higher global interest rates draw money toward safer returns abroad, and a weakening naira prompts investors to sell early. When oil fell in 2016 and 2020, foreign investors withdrew and could not convert naira to dollars as supply dried up, leaving the CBN to clear more than $7 billion in trapped obligations into 2024.
The Oil Boost is No Longer Certain
Oil looked like a dependable source of the dollars behind the reserves only months ago. Earlier in 2026, concern over disruption around the Strait of Hormuz lifted crude prices, and stronger receipts flowed in, with crude oil export earnings of $8.11 billion in the first quarter in the CBN’s balance-of-payments data. That support is now easing. The tension has subsided, and Brent traded near $72 on June 29, down about 24 per cent over the month, back to pre-conflict levels. With the price boost gone and output constrained, reserves are more exposed, leaning on non-oil earnings and investor patience rather than oil.
The Naira Still Trades at Two Prices
The naira has traded at two prices, an official rate and a higher parallel-market rate, and closing that gap into one trusted price is what many investors might watch most. Before committing funds, they may want assurance they can convert naira to dollars at a fair rate when they exit, and a wide gap revives the fear of being trapped that lingers from earlier shortages. The gap has narrowed to roughly N20 to N30, with the CBN’s official rate near N1,380 per dollar on June 26 against parallel-market quotes around N1,400. The International Monetary Fund (IMF) 2026 Article IV review urged Nigeria to depend less on this fast-moving portfolio money and to keep phasing out its multiple exchange-rate practices. The CBN’s Foreign Exchange Manual, in force from 1 June, is intended to make the market clearer, though such rules build confidence only once investors can freely trade dollars at the posted rate.
What could Make the Build Durable
A few signs that may show the build turning durable include a smaller gap between the official and street naira rates, more long-term foreign investment, and steadier oil earnings. A gap that stays small, now roughly N20 to N30, may mean investors trust the official rate and no longer need the street market. A clear rise in foreign direct investment, only $135 million last quarter against $9.86 billion of short-term money, might mean lasting capital is replacing funds that can leave at the next auction. Oil earnings that hold up, rather than sliding from the low $70s, should help keep reserves steady, since oil and gas bring in most of Nigeria’s export dollars.
“Reserves built on money chasing high yields can fall as fast as they rose, as they did after the last two oil shocks, when investors left, and the CBN spent years clearing a foreign-exchange backlog,” Precious added. “What holds through a downturn is slower money, direct investment, steady oil and non-oil export earnings and one credible naira rate, and that is the shift Nigeria has yet to make.”
By Olajumoke Bello
Across Nigeria, small and medium enterprises remain the backbone of economic activity. They drive trade, create jobs, and sustain millions of livelihoods. Yet, despite their importance, many SMEs continue to operate below their full potential due to persistent structural challenges.
Access to finance remains one of the most cited constraints. However, the issue today goes beyond the availability of capital. Many businesses struggle with financial readiness, weak documentation, and limited understanding of what lenders require. This often leads to missed opportunities, even when funding options exist.
At the same time, SMEs face gaps in market access and visibility. Business owners operate in highly localised environments, with limited exposure to broader networks that can unlock partnerships, new markets, and growth opportunities. This isolation can constrain scalability and reduce long-term competitiveness.
Equally important is the capability gap. Many entrepreneurs grow through resilience and experience but lack structured knowledge on critical areas such as financial management, export readiness, and digital adoption. Without this, even well-capitalised businesses can struggle to sustain growth.
These challenges point to a clear need for a more practical and integrated approach to SME support. It is no longer sufficient to offer standalone solutions. SMEs require ecosystems that combine knowledge, access, and direct engagement in ways that reflect how they actually operate.
A key shift is the move from centralised interventions to localised engagement. SMEs are deeply influenced by their immediate environments, whether markets, industrial clusters, or trade corridors. Solutions must therefore be brought closer to where these businesses function, allowing for more relevant support and stronger relationships.
Another important shift is from awareness to action. Business owners do not only need information; they need insights that they can apply immediately. This includes understanding how to structure their finances, how to access trade opportunities, and how to connect with the right partners to scale their operations.
There is also a growing need for continuity. Many SME-focused initiatives deliver strong initial impact but lack follow-through. For support to be effective, it must extend beyond one-off engagements into sustained relationships, with clear pathways for onboarding, advisory, and growth.
For financial institutions, this presents both responsibility and an opportunity. Supporting SMEs now requires moving beyond transactional banking to deeper partnership models. It requires understanding businesses at a granular level and co-creating solutions that evolve with their needs.
At Stanbic IBTC, this perspective continues to shape our approach to SME development. Our focus is on delivering practical support that translates into real business outcomes, helping enterprises grow, compete, and contribute more meaningfully to the economy.
As part of this commitment, we are extending our SME engagement to the regions through the Nigeria Business Summit Regional Tour. The tour will take structured, on-ground activations into key commercial hubs, where SMEs can access funding guidance, trade insights, advisory support, and direct engagement with financial experts.
The regional tour will take place across five strategic locations, bringing these solutions closer to business owners in Aba, Onitsha, Ibadan and Kano.
This approach reflects an important principle. When support moves closer to businesses and when solutions are delivered in ways that are practical and continuous, SMEs are better positioned to grow sustainably. In turn, this strengthens not only individual enterprises but the broader economy.
Olajumoke Bello is the Head of Enterprise Banking at Stanbic IBTC Bank
