Nigeria may be standing on the edge of its strongest economic upswing in more than ten years, if the signals that economist Bismarck Rewane is tracking continue to align.
At the 2025 Parthian Economic Discourse in Lagos, Rewane painted a picture of an economy finally shaking off years of turbulence, soaring inflation, a battered currency, and a drought of investment and moving toward what he calls “a profound economic reset.”
This reset isn’t driven by any single breakthrough. Instead, it is the convergence of reforms, market confidence, sectoral restructuring and improving macroeconomic conditions that, in his telling, could propel Nigeria into 2026 with momentum not seen in a decade.
A Market on the Brink of Transformation
One of Rewane’s boldest claims is that Nigeria’s capital market is preparing for a leap that could redefine its role in Africa’s financial landscape.
He forecasts the Nigerian Exchange’s market capitalisation to surge to N262 trillion in 2026, nearly triple its current size and equivalent to 72% of the nation’s projected GDP.
This acceleration, he says, will be powered by long-awaited mega listings, notably the Dangote Refinery and the Nigerian National Petroleum Company (NNPC), alongside booming performance in telecoms, banking, cement, and consumer goods.
Investor sentiment, he notes, is already shifting as FX volatility eases, inflation cools, and corporate earnings strengthen. “Nigeria’s equity market,” he insists, “is entering a new cycle of expansion.”
From Crisis to Stability: Inflation, Rates and the Naira
After riding the waves of inflation that surged past 34 percent last year and a currency that shed 70 percent of its value, Nigeria may finally be seeing the outlines of stability.
Rewane expects inflation, both food and core, to fall toward 20 percent in 2026, driven by: A firmer disinflation stance by the Central Bank of Nigeria, Improved domestic refining reducing fuel-price shocks, Higher manufacturing output, Productivity gains and lower logistics and supply-chain costs.
As inflation cools, household purchasing power should start to recover, breathing life back into retail, services, and industry.
This shift may also open the door to cautious interest-rate cuts, the first after two years of aggressive tightening, although Rewane warns that the CBN will move carefully to avoid undoing its progress.
Perhaps most striking is his projection for the naira. He sees the currency strengthening and stabilising between N1450 and N1500/$ in 2026, supported by rising oil output, stronger reserves, reduced arbitrage opportunities, and moderated import demand.
“Exchange-rate stability,” he stresses, “will be the anchor of investor confidence.”
Growth Returns and Six Industries Lead the Charge
With monetary and fiscal reforms converging, Rewane projects GDP growth of 4.1% in 2026, driven by expanding private-sector activity, infrastructure improvements and increased local value addition.
Six industries, he says, will shape the economy’s trajectory:
1. Agriculture & Agro-processing – N104.6 trillion
2. Real Estate & Construction – N72.41 trillion
3. Telecommunications – N41.07 trillion
4. Manufacturing – N38.25 trillion
5. Creative Economy – N7.23 trillion
6. Technology & Fintech – N2.97 trillion
Each sector is undergoing a transformation powered by urbanisation, digital growth, regional trade integration and population pressure.
Earnings Signal a New Corporate Era
Corporate performance, according to the FDC economist, will offer some of the clearest proof that Nigeria is entering a new economic cycle.
MTN Nigeria is projected to hit N1.7 trillion in Q1 2026 revenue and N2.22 trillion in Q2, lifted by data expansion and tariff adjustments.
Dangote Cement is expected to post Q1 revenue of N1.3 trillion and Q2 revenue of N1.37 trillion, with profit after tax in Q2 soaring more than 100% to N628 billion, driven by export growth and infrastructure demand.
Stronger corporate results, he says, will help power market capitalisation even higher.
A Stronger Banking Sector and a Rebounding Pensions Market
Nigeria's banks, after navigating inflationary shocks and FX volatility, are heading into 2026 with improved stability.
Rewane sees leadership emerging from: Big universal banks with fortified balance sheets, Digital-first lenders, and Fintechs reshaping SME finance and retail payments.
Pension funds, meanwhile, may experience early-year turbulence but are expected to finish strong with 12-15% growth in net asset value, buoyed by improving liquidity and renewed confidence in equities and government securities.
But Risks Still Lurk
Rewane cautions that Nigeria’s outlook is not insulated from global fragility.
Geopolitical tensions, shifts in energy markets, and softening commodity prices could weigh on fiscal and market stability.
Domestically, he highlights four critical risks: Oil prices dipping below $60 per barrel, worsening insecurity in food-producing regions, election-year spending excesses in 2026 and sharp commodity-price drops if geopolitical tensions cool
The difference between a boom and a setback, he says, will depend on discipline, both fiscal and monetary and Nigeria’s ability to safeguard its productive zones.
A Call Beyond Government
Closing the discourse, Oluseye Olusoga, Group Managing Director of Parthian Capital, issued a reminder: economic transformation is not the job of government alone.
“Security is not a job only for the government,” he said. “It should be our own job too. Without security, investment won’t flow.”
If Rewane’s projections hold, Nigeria may be approaching not just a recovery, but a rare opportunity to rewrite its economic story. The question is whether the country can seize the moment and reach El Dorado – time will tell.
No comments:
Post a Comment