Onome Amuge
Nigeria’s foreign exchange reserves are projected to continue their upward trajectory in 2026, providing the naira with the firepower needed to maintain stability, the Central Bank of Nigeria (CBN) said. In its latest macroeconomic outlook, the Abuja-based institution forecast external reserves rising to $51.04 billion, supported by ongoing market reforms.
“Reforms in the foreign exchange market are expected to sustain exchange rate stability, while external reserves are projected to increase to US$51.04 billion,” the CBN noted. This represents a $6.03 billion rise from an estimated $45.01 billion at the end of 2025, up from $40.19 billion at the close of 2024.
Stronger reserves are widely expected to underpin a firmer naira, a development likely to reinforce investor confidence and improve the balance sheets of corporates with import-dependent operations. By curbing foreign exchange losses, businesses could see profitability gains, analysts say.
Africa’s fourth largest economy is witnessing a gradual economic turnaround after years of currency volatility, depleting reserves, and subdued growth. With momentum already building in 2025, the central bank anticipates gross domestic product (GDP) growth of 4.49 per cent in 2026, up from an estimated 3.89 per cent by the end of 2025 and 3.38 per cent in 2024.
“The projection is hinged on continued gains from broad-based structural reforms and a gradually easing monetary policy stance. These are expected to further improve the business environment, enhance investor confidence, and support private-sector-led growth,” the CBN said.
The bank highlighted the oil sector as a key driver of future expansion, citing increased production, investment, and enhanced domestic refining capacity. Improved security surveillance in oil-producing regions is also expected to support growth, the report added.
Inflation and monetary policy outlook
The CBN outlined plans to implement an inflation-targeting framework aimed at reducing consumer price inflation to 13 per cent over the next two years. Transitional targets are set to decline from 18.5 percent in 2025 to 13 per cent by 2027, reinforcing policy credibility and guiding expectations across government, markets, and the public.
“Inflation is expected to continue its downward trend in 2026,” the report said. The anticipated moderation reflects continued stability in foreign exchange and energy markets, the lagged impact of prior rate hikes, and improved policy coordination.
The CBN attributed part of the expected slowdown in inflation to declining food and petroleum marketing sector (PMS) prices. Increased competition in the midstream segment of Nigeria’s oil industry is projected to accelerate the moderation in PMS prices, while a faster decline in food costs should help dampen headline inflation.
Current data shows inflation at 14.45 per cent in November 2025, marking the eighth consecutive month of decline and the lowest rate since 2020, prior to the rebasing of the consumer price index.
