Nigeria’s 2026 Economic Outlook: Stability, Growth and the Banking Sector at a Crossroads

As Nigeria prepares for the 2026 fiscal year, the Central Bank of Nigeria (CBN) has painted a picture of cautious but substantive economic recovery, anchored on reforms in macroeconomic management, structural adjustments, and financial system strengthening. In its recently released 2026 Macroeconomic Outlook report, the apex bank projects an economy that is expanding steadily, inflationary pressures cooling significantly, and the external sector regaining resilience. However, much of this optimism is predicated on deeper reforms, particularly in the banking sector, where a major recapitalization drive is underway and poised to reshape financial intermediation.

Nigeria GDPAt the core of the CBN’s outlook is the projection that Nigeria’s real Gross Domestic Product (GDP) will expand by 4.49 % in 2026, a marked improvement from growth estimates in 2025, driven by broader macroeconomic stability and enhanced performance in both oil and non-oil sectors. Coupled with ongoing foreign exchange reforms and improvements in export receipts, this growth trajectory suggests that the Nigerian economy is on track to consolidate recent reforms.

Nigerians’ purchasing power and External Reserves:  This is expected to ease sharply to approximately 12.9 %, from the significantly higher rates observed in recent years, reflecting better food supply conditions, stabilized fuel costs and a disciplined monetary stance. In addition, external reserves are projected to climb to nearly US$51.04 billion, signalling improved external buffers and reduced exchange rate volatility.

While macroeconomic indicators show promise, Nigeria’s fiscal and debt dynamics remain critical risk factors. The CBN forecasts a fiscal deficit of around ₦12.14 trillion (or roughly 3 % of GDP) for 2026, driven by fiscal pressures and public sector financing needs. Public debt is also expected to modestly increase to around 34.7 % of GDP, albeit on what the apex bank describes as a “sustainable” path to improve  exchange rate stability and structural revenue reforms such as the Nigeria Tax Act (2025).
The CBN has explicitly warned that public borrowing could tighten liquidity conditions in the private sector and potentially propagate higher interest rates if not carefully managed.  This is an  important point for the banking sector already adjusting to new capital adequacy requirements.

Banks Recapitalisation Among the most transformational components of the  2026 outlook is the CBN’s bank recapitalisation initiative, designed to strengthen Nigeria’s financial system by raising the capital base of commercial banks. The policy aims to build sounder and more resilient banks that will be able to support economic growth through deeper lending, better risk absorption, and stronger governance.
Under the programme, new minimum capital requirements were introduced, compelling banks to raise fresh capital either through rights issues, public share offers, or strategic investments. And  the deadline is March 31, 2026. Though maintaining the deadline is strictly to determine by the Central Bank of Nigeria.
Under this Recapitalisation, banks are required to raised their minimum paid up capital according to their operational authorization.International Banks to raise their paid up capital from N50bn to N500bn. National Banks to raise their paid up capital from N25bn to N200bn.Regional Banks to raise from N10bn to N50bn.Merchant Banks from N15bn to N50hn.Non – Interest Banks with National authorisation to raise their paid up capital from N10bn to N20bn while non – interest Banks with Regional authorization should raise their paid up capital to N10bn from N50bn.