Nigeria’s 2026 Growth at Risk from External Shocks – Stanbic IBTC

Stanbic IBTC has warned that Nigeria’s economic growth in 2026 could be disrupted by external shocks, including oil price volatility and global political uncertainty, despite improving macroeconomic fundamentals. The caution came from analysts at Stanbic IBTC Asset Management Limited, led by economist Abdul Azeez, during a virtual review titled “Nigeria 2026 Economic Outlook” held on February 10, 2026. While the analysts projected modest growth and a moderation in inflation, they emphasised that the recovery remains highly sensitive to global developments and the continuity of domestic reforms.

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The team highlighted oil price fluctuations, geopolitical developments, and the uncertainty surrounding policy reforms as the most significant threats to Nigeria’s macroeconomic stability. According to Azeez, Nigeria’s economic outlook is cautiously positive, but external vulnerabilities remain substantial. He noted that the performance of the oil sector, government fiscal policies, and the sustainability of structural reforms will be critical in shaping the country’s economic trajectory in the coming year. Changes in global political landscapes, including U.S. policy shifts, could directly affect oil prices, trade balances, and ultimately Nigeria’s fiscal and current account positions.

Analysts acknowledged that domestic reforms, such as the removal of fuel subsidies, liberalisation of the exchange rate, and improvements in domestic refining capacity, have strengthened the economy. These measures have lowered Nigeria’s fiscal breakeven oil price to around $50 per barrel, helped moderate inflation expectations, and improved investor confidence. Despite these gains, oil remains the dominant source of government revenue and export earnings, leaving the economy exposed to sustained price weakness. A prolonged oil price decline below $50 per barrel could reduce fiscal revenue, increase borrowing needs, and put pressure on external reserves.

Stanbic IBTC projects Nigeria’s GDP growth for 2026 to range between 4.1 and 4.4 per cent, supported by a stabilising naira and easing inflation. However, the analysts stressed that external risks remain central to the outlook, and that the continuation of domestic reforms is critical to sustaining investor confidence. They noted that any reversal of subsidy removal or foreign exchange liberalisation could undermine the macroeconomic gains achieved over the past two years. The team also pointed out that Nigeria’s macroeconomic stability is increasingly linked to external political and commodity market developments, even as domestic reforms strengthen internal adjustment mechanisms.

The warning from Stanbic IBTC contrasts with recent comments from the Central Bank of Nigeria, which emphasised domestic factors such as election-related spending and excess liquidity as primary threats to stability. The analysts advised policymakers and investors that while Nigeria’s economic recovery is gaining traction, its sustainability will depend not only on domestic reform measures but also on global oil dynamics and geopolitical stability. Market sentiment already reflects cautious optimism, particularly among Tier-1 banks, amid expectations of improving macroeconomic fundamentals.