What's Happening?
Nigeria is experiencing a positive shift in its economic landscape as recent reforms have begun to yield significant results. At the Nigerian Economic Summit Group's (NESG) 2026 Macroeconomic Outlook event in Lagos, it was reported that the country's
debt-to-GDP ratio has decreased to 36.1%, one of the lowest in Africa. This improvement is attributed to the formal recognition of previously unreported debts and exchange rate reforms. Inflation has also eased from a peak of 33.18% in 2024 to 14.45% by November 2025, and foreign exchange volatility has moderated. These changes have bolstered investor confidence, with external reserves reaching approximately $45.5 billion. The NESG emphasized the importance of sustaining reform momentum to ensure macroeconomic stability and inclusive growth.
Why It's Important?
The economic reforms in Nigeria are crucial as they signal a transition from stabilization to consolidation, which is expected to foster inclusive growth and improve living standards. The reduction in the debt-to-GDP ratio and the easing of inflation are significant indicators of economic health, attracting investor optimism. This shift is particularly important for Nigeria, a major African economy, as it seeks to strengthen its position in the global market. The focus on agriculture and manufacturing as key growth sectors could lead to increased employment and economic diversification, reducing reliance on oil revenues. The reforms also aim to create a more stable economic environment, which is essential for long-term development and poverty reduction.
What's Next?
The NESG has outlined a technical outlook projecting Nigeria's GDP growth at 5.5% in 2026, with a medium-term target of single-digit inflation by 2029. The focus will be on consolidating reforms to prevent economic reversal and rebalancing growth towards productive sectors like agriculture and manufacturing. Strengthening these sectors could boost manufacturing growth by 6-8% and drive inclusive development. The NESG emphasizes the need for evidence-based policy advocacy to sustain the reform momentum and ensure that economic gains translate into improved living standards for the population.
