Seven factors that could jolt Nigeria's economy before 2026 ends

Nigeria's economy has shifted from stabilising key indicators to delivering real gains in investment, productivity and living standards, according to FirstBank's Mid-Year Economic & Market Outlook 2026. The report says the second half of 2026 will be defined by whether recent reforms translate into jobs, business growth and better household welfare.

Stability must reach ordinary Nigerians

FirstBank says restoring macroeconomic stability is no longer the main challenge. The bigger question is whether stronger foreign reserves, improved FX conditions and investor confidence will lead to better living standards.

According to the bank: “The central question is no longer the restoration of macroeconomic stability, but the extent to which that stability begins to strengthen productive economic activity, stimulate private investment and deliver broader improvements across the real economy.”

Private investment, inflation and borrowing costs

The bank believes attracting more private investment will determine whether Nigeria can sustain its recovery. Attention is expected to shift toward how effectively existing reforms encourage businesses to expand, create jobs and increase production.

Despite improvements in several indicators, FirstBank warns that inflation remains elevated while financing conditions are still restrictive. These factors could continue to weigh on businesses and households, slowing the pace of economic gains.

FX stability and capital inflows

Continued stability in Nigeria's foreign exchange market is one of the biggest factors to watch. Nigeria's external reserves rose to $51.46 billion as of June 30, 2026, while liquidity in the official FX market improved, helping strengthen investor confidence.

Capital importation rose to $10.37 billion in the first quarter of 2026, an 83.8% year-on-year increase. FirstBank says sustaining this momentum will depend on Nigeria's ability to preserve macroeconomic stability while attracting long-term investment.

Refining and the changing oil trade

Domestic refining is reshaping Nigeria's trade profile. Refined petroleum exports increased by 20.3% quarter-on-quarter to $2.37 billion in the first quarter of 2026, while imports of refined petroleum products plunged 87.5% to $310 million from $2.48 billion in the previous quarter.

This contributed to Nigeria's goods account surplus widening to $5.95 billion. The report also highlighted the role of the 650,000-barrel-per-day Dangote Refinery, which supported exports of gasoline, diesel and jet fuel across Africa and into Europe during the first half of the year.

Productivity, jobs and household welfare

FirstBank says the success of Nigeria's economic reforms will no longer be judged by stronger macroeconomic indicators alone. The focus will shift to whether reforms boost productivity, expand domestic value addition, support private-sector growth and improve household welfare.

As the bank concludes: “Macroeconomic stabilisation is the foundation, but our collective focus must now shift to strengthening productive activity, accelerating private investment and delivering broad-based improvements that create lasting prosperity for Nigerians.”

For Nigerian businesses and households, the next half-year test is simple: will the stability already achieved begin to show up as cheaper borrowing, better jobs and lower living costs before 2026 ends?