Nigeria’s Economy Shows Signs of Stability, but Structural Weaknesses Remain — Yemi Kale
Nigeria’s economy is gradually finding its footing after years of volatility, but deep-seated structural weaknesses continue to hold back inclusive growth, according to Dr. Yemi Kale, Group Chief Economist and Managing Director of Research and Trade Intelligence at Afreximbank. Speaking at the FirstBank Nigeria Economic Outlook 2026 in Lagos, Kale said recent macroeconomic improvements should not be mistaken for a complete economic turnaround.
While acknowledging that stability has returned to key indicators, Kale warned that it merely creates room for planning rather than solving Nigeria’s long-standing challenges. He noted that reforms in monetary policy have helped restore confidence, with Nigeria now firmly in a disinflation cycle after the central bank kept monetary conditions tight long enough to stabilise expectations among households and businesses.
Kale added that foreign exchange reforms are beginning to yield results, pointing to improved transparency, reduced arbitrage and calmer speculative activity. According to him, lower FX volatility has strengthened market credibility and encouraged renewed portfolio inflows, though overall economic growth remains fragile and uneven across sectors.
Despite Nigeria’s apparent sectoral diversity, Kale said the economy lacks productive diversification, explaining why headline GDP growth often feels disconnected from everyday realities. He also cautioned against rising public debt, stressing that the real issue is affordability, as interest payments continue to consume a large share of government revenue faster than economic growth.
Looking ahead, Kale emphasised that sustaining reforms is the country’s biggest test, warning that any reversal could erase recent gains. Echoing cautious optimism, FirstBank Group CEO Segun Alebiosu said easing fuel and food prices, improving manufacturing activity and rising capital inflows suggest Nigeria has “turned a corner,” but stressed that discipline, resilience and sustained reforms are crucial to translating stability into jobs, productivity and better living standards.
source: punch