Nigeria’s external reserves are projected to rise to about $53bn by the end of 2026, as the Nigerian Economic Summit Group expects stronger oil production, improved non-oil exports and increased foreign exchange inflows to support the country’s external sector. The projection was disclosed during the NESG’s Half-Year Economic Outlook presentation at the Nigerian Industrialisation and Competitiveness Forum in Lagos.
According to the NESG’s Interim Director of Research and Development, Dr Joseph Ogebe, the external sector is expected to remain resilient in the second half of the year, with the naira broadly stable. He attributed the projected reserve growth to higher crude oil production, favourable oil prices, stronger non-oil exports and sustained current account surpluses. Improved investor confidence, increased foreign portfolio investments and stronger diaspora remittances are also expected to improve foreign exchange liquidity.
The economic outlook, however, comes with some pressure points. The NESG expects inflation to remain elevated, averaging 15.5 per cent in the second half of 2026 and across the full year. Insecurity in farming communities, flooding, rising transportation costs, election-related spending and increased demand during the festive season were identified as factors that could keep prices high. Despite these challenges, the group projects 4.5 per cent economic growth in the second half of 2026, taking full-year GDP growth to about 4.2 per cent.
The NESG Chairman, Olaniyi Yusuf, said Nigeria must look beyond its traditional dependence on crude oil revenues by building a stronger and more competitive industrial sector. He noted that manufacturing contributed about 10 per cent of Nigeria’s GDP and 1.4 per cent of exports in the first quarter of 2026, stressing that the African Continental Free Trade Area could provide a major opportunity for Nigerian businesses if the country improves its productive capacity. Yusuf also called for greater use of private investment, development finance and blended financing rather than relying heavily on public funds to finance industrial growth.
Meanwhile, Professor Stefan Dercon of the University of Oxford argued that Nigeria’s economic transformation would require stronger cooperation among political, business and traditional leaders, alongside consistent policy implementation. He said reforms such as exchange-rate unification, fuel subsidy removal and tariff adjustments were difficult but necessary steps toward economic stability. With the NESG forecasting stronger reserves and moderate economic growth, the bigger challenge for Nigeria will be turning improved macroeconomic indicators into sustainable industrial expansion, more jobs and broader economic opportunities for citizens.
source: punch
