Nigeria’s economic recovery is showing encouraging signs, but the progress could quickly unravel if the Federal Government fails to strengthen and sustain ongoing reforms, the Nigerian Economic Summit Group (NESG) has warned. In its latest Economic and Policy Review Journal (H1 2026), the private-sector policy think tank cautioned that while recent economic reforms have helped stabilize key indicators, the gains remain too fragile to guarantee lasting prosperity. The group stressed that stronger institutions, fiscal discipline, structural transformation, and inclusive economic policies are now essential to prevent the country from sliding backward.
According to the report, Nigeria’s economy expanded by 3.9 percent in 2025, improving from 3.2 percent in 2024, with the momentum carrying into the first quarter of 2026. Growth was largely driven by stronger performances in agriculture, manufacturing, construction, ICT, finance, trade, and real estate, alongside increased crude oil production. These sectors collectively accounted for over 90 percent of economic growth and more than 83 percent of the country’s real Gross Domestic Product (GDP), reflecting a gradual but steady recovery after years of economic challenges.
The NESG also highlighted notable improvements in Nigeria’s macroeconomic environment. Exchange rate stability improved significantly as the gap between the official and parallel foreign exchange markets narrowed sharply, while external reserves climbed above $51 billion in June 2026. Inflation had been on a downward trend until geopolitical tensions in the Middle East triggered fresh increases in food and energy prices, pushing headline inflation from 15.1 percent in January to 15.9 percent in May. Despite these improvements, the report warned that rising debt obligations and fiscal pressures continue to threaten the country’s long-term economic stability.
While acknowledging that reforms such as fuel subsidy removal and exchange rate unification have begun to deliver measurable results, the NESG argued that macroeconomic stability alone will not create enough jobs, reduce poverty, or improve living standards. The report warned that many developing economies lose reform momentum after achieving initial stability, often resulting in renewed inflation, exchange rate volatility, and fiscal stress. It therefore described 2026 as a defining year for Nigeria to transition from short-term crisis management to lasting economic transformation.
To safeguard the recovery, the NESG urged the government to implement stricter fiscal rules, broaden domestic revenue generation, strengthen debt management, and deepen institutional reforms that improve regulatory quality and investor confidence. The group also called for greater investments in infrastructure, reliable electricity, digital connectivity, industrial development, education, healthcare, and skills acquisition through public-private partnerships and innovative financing models. According to the report, Nigeria’s ability to convert today’s economic gains into sustainable and inclusive growth will ultimately depend on unwavering policy commitment, effective implementation, and reforms that directly improve the lives of millions of Nigerians.
source: The guardian
