Nigeria’s economy maintained a steady growth trajectory in the first half of 2026, defying global uncertainties and domestic structural challenges, according to the H1-2026 State of the Economy Report released by the Nigerian Economic Summit Group (NESG).

The report, titled Turning Potential into Progress: Accelerating Nigeria’s Industrialisation for Economic Transformation and Inclusion, highlights how resilient non-oil sector performance, improved private sector activity, and stronger external reserves kept the economy on a positive path despite inflationary pressures.

Global growth softened as the Middle East crisis triggered higher energy prices. Yet, Nigeria stood out as the world’s best-performing equity market, with the MSCI Nigeria Index surging 61.1 percent in H1-2026, underpinned by macroeconomic reforms, FX liquidity, and stronger investor confidence.

Domestically, Nigeria’s GDP expanded by 3.9 percent in Q1-2026, up from 3.1 percent in Q1-2025. The non-oil sector drove this expansion, contributing 96.1 percent of real GDP. Key drivers included ICT (11.0%), agriculture (3.2%), manufacturing (3.3%), finance and insurance (8.5%), and construction (6.4%). The oil sector also improved, expanding by 2.6 percent.

However, disinflation gains reversed as headline inflation averaged 15.5 percent in H1-2026, climbing from 15.1 percent in January to 15.9 percent in June due to higher fuel costs and food prices. Petrol pump prices jumped to N1,596.3 per litre in May, pushing up transport and production costs.

On the fiscal front, government revenue rose to 2.8 percent of GDP in Q1-2026, but high expenditure left a budget deficit of 4.3 percent. Public debt climbed to N159.4 trillion, with domestic borrowing accounting for 54.8 percent. Meanwhile, monetary policy saw the Central Bank of Nigeria cut the Monetary Policy Rate by 50 basis points to 26.5 percent in February to support private sector credit expansion.

Looking ahead, the NESG projects GDP growth to accelerate to 4.5 percent in H2-2026, bringing full-year growth to 4.2 percent. External reserves are expected to reach $53 billion by year-end, supported by favorable oil prices and stronger non-oil exports.

The report emphasised that rapid industrialisation is an economic imperative linking industrial inputs such as infrastructure, technology, and finance to outcomes like employment and poverty reduction remains essential to turning Nigeria’s economic potential into lasting, inclusive progress.