…For the recovery to become more meaningful, PwC’s outlook suggests that macroeconomic stability must now be translated into lower costs, stronger productivity, greater access to finance, more investment and ultimately more jobs and purchasing power for Nigerians
FRI AUG 21 2026-theGBJournal| PwC has released its H2 2026 Nigeria Economic Outlook, highlighting how Nigeria can turn recent gains in macroeconomic stability into more inclusive growth, while warning that structural constraints, fiscal pressures and external vulnerabilities could limit the benefits reaching households and businesses.
Nigeria entered the second half of 2026 with improved macroeconomic conditions.
Real GDP grew by 3.89% year-on-year in the first quarter, while the naira remained broadly stable and external reserves rose.
However, structural constraints continue to limit how far these gains reach households and businesses, underscoring the need for reforms that translate macroeconomic improvements into stronger living standards, lower business costs and wider investment opportunities.
Sector performance remained mixed in the first quarter. ICT benefited from rising data usage, Finance & Insurance from stronger financial intermediation and transaction activity, Construction from increased infrastructure activity, and Agriculture from higher crop production.
Performance was weaker across some sectors.
Electricity (-15.30%) contracted amid lower generation availability, while Oil & Gas (2.57%) was constrained by lower crude production.
Trade (2.08%) and Real Estate (2.29%) also lagged, reflecting high operating, logistics, financing and building costs.
The naira remained broadly stable in June 2026, with the official NFEM rate closing at ₦1,379.68/$ in June, while the parallel-market rate stood at ₦1,385/$.
This kept the official-parallel market gap narrow and signalled improved FX-market stability.
FX stability was driven by stronger official-market liquidity, improved external buffers and continued FX-market reforms.
NFEM turnover rose by 43.6% m/m to US$12.92 billion in June 2026, from US$8.99 billion in May, while reserves rose by 38.3% y/y to US$51.46 billion, from US$37.21 billion in June 2025.
”However, stability remains vulnerable to portfolio-flow reversals, oil-price volatility and intervention pressures, given Nigeria’s continued reliance on short-term capital inflows and the need to sustain dollar supply,” PwC noted.
”The improvement in the foreign exchange market therefore provides an important buffer, but maintaining stability will depend on deeper reforms, stronger reserve accumulation and sustained confidence in the market.”
The report focuses on what Nigeria can do next, identifying four actions to unlock a broader reform dividend.
They include:
Scale up targeted support for consumers and reduce food, energy and transport costs to strengthen household purchasing power.
Expand access to affordable, longer-term finance and address the operating constraints limiting MSME growth.
Prioritise power, transport, broadband, security, education and workforce development to lower business costs and raise productivity.
Build a stronger pipeline of bankable projects and remove the barriers preventing investor interest from becoming productive investment and jobs.
Looking ahead, PwC projects that Nigeria’s economy will grow by 4.2% in 2026, supported by higher crude oil production and performance in key sectors.
The projection points to a continued recovery, but also highlights the importance of sustaining the reforms and investment required to convert stronger headline growth into broader economic gains.
Fiscal pressures may persist in H2 2026, driven by continued spending needs, a persistent budget deficit and elevated government financing requirements.
The combination of spending demands and financing needs could continue to constrain fiscal flexibility and place pressure on government borrowing.
Inflation is expected to moderate in H2 2026, although supply-side shocks and pre-election spending could create upside pressures.
A sustained decline in inflation would provide some relief to households and businesses and could give policymakers greater room to support economic activity.
The naira is expected to remain broadly stable but susceptible to volatility from global oil prices, capital flows and domestic foreign exchange demand conditions.
Maintaining the recent improvement in FX stability will therefore remain a key test for policymakers in the second half of the year.
The CBN is expected to maintain a tight monetary policy stance, with scope for gradual rate cuts if the decline in inflation is sustained. Any easing, however, is likely to remain dependent on continued progress on inflation, exchange-rate stability and broader macroeconomic conditions.
Overall, Nigeria’s macroeconomic conditions have stabilised, although household, fiscal and external pressures will shape its H2 2026 performance.
For the recovery to become more meaningful, PwC’s outlook suggests that macroeconomic stability must now be translated into lower costs, stronger productivity, greater access to finance, more investment and ultimately more jobs and purchasing power for Nigerians.
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