Nigeria's economic performance in 2026 will be shaped by global forces as well as domestic reforms, with slow growth, fragile trade flows and elevated geopolitical risks expected to impact fiscal revenues and investor sentiment.
According to PwC's 2026 Nigeria Economic Outlook, global economic growth is projected to slow to about 3.1 percent in 2026, while global merchandise trade growth is expected to slow sharply to about 0.5 percent, reflecting weak demand and lower consumption in major economies.
The slowdown in global trade is likely to hamper Nigeria's non-oil export expansion, reinforcing the country's continued reliance on oil earnings and capital flows as key drivers of growth.
The report said that while services activity remains resilient globally, weak manufacturing output and inventory adjustments are limiting demand for goods, reducing opportunities for export-led growth in border markets such as Nigeria.
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Despite falling expectations, financial conditions remain tight
Global financial conditions are expected to gradually ease in 2026 as major central banks begin cautious policy adjustments.
For Nigeria, a gradual decline in global rates could support refinancing conditions and ease immediate external funding pressures. Yet tariff uncertainty and renewed trade protectionism could still hamper investment flows, tighten FX liquidity and increase imported inflation risks. As a result, foreign capital flows into Nigeria are expected to remain selective and reform-dependent, favorable to a period of policy credibility and macroeconomic stability.
Oil price outlook creates fiscal and forex risks
Geopolitical tensions remain a major source of uncertainty for global energy markets. “Oil prices are forecast to soften to $55 a barrel in 2026, reflecting weak demand growth and rising global inventories, which are subject to increased risk,” PwC says.
Low oil prices will weaken Nigeria's fiscal revenues and foreign exchange inflows, increasing budgetary pressures at a time when debt service already absorbs a significant portion of government revenues. Geopolitical shocks, including conflicts in Eastern Europe and the Middle East, could also disrupt trade routes, increase freight and insurance costs and delay energy investments, further complicating Nigeria's external position, the report said.
Increased geopolitical risks and regional impacts
Global geopolitical risk levels are expected to remain high in 2026 due to persistent conflicts, global power rivalry and rising protectionism. PwC says this environment increases Nigeria's external vulnerabilities, particularly due to oil price volatility, supply chain disruptions and tight financial conditions.
Beyond global risks, political instability in parts of West Africa adds another layer of uncertainty. Recent coups and coup attempts in the sub-region have increased the risk of sanctions, border restrictions and trade disruptions, which could undermine regional commerce and reduce investor confidence in Nigeria despite ongoing reforms.
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Outlook depends on flexibility and improved delivery
PwC concludes that Nigeria's macroeconomic outlook in 2026 will continue to be shaped by oil market dynamics, capital flows and regional stability rather than strong global trade momentum. With global growth slowing and financial conditions still tight, the economy's resilience will depend on maintaining FX stability, strengthening non-oil revenue mobilization and maintaining the pace of recovery.
The report cautions that deceleration in inflation and improving reserves provide some buffer, but cautions that external shocks – from geopolitics to global trade tensions – remain key downside risks to growth, fiscal stability and exchange rate performance in the year ahead.
