Macroeconomic Report & Economic Updates

According to the 2025 Annual Report and Statement of Accounts published by the Central Bank of Nigeria (CBN), Nigeria recorded total foreign exchange (FX) inflows of US$109.86 billion in 2025, representing a 13.81% increase from US$96.53 billion in 2024. This growth was driven largely by autonomous inflows, particularly non-oil export receipts and capital importation. Net FX inflows rose to US$60.81 billion, despite a 27.83% increase in aggregate outflows to US$49.05 billion and a 59.36% rise in overall FX utilisation, which reached US$42.83 billion. FX utilisation was largely concentrated in invisible imports and visible imports for the industrial sector, the latter accounting for 42.11% of total utilisation. Meanwhile, the decline in CBN[1]sourced inflows was primarily attributed to lower receipts from government debt and foreign exchange swap transactions. The increase in net FX inflows underscores the growing contribution of autonomous sources to Nigeria's foreign exchange liquidity. This development has strengthened private-sector liquidity, improved investor confidence, and supported the expansion of non-oil trade. However, the significant increase in autonomous outflows and the economy's ongoing reliance on imported industrial inputs highlight persistent structural weaknesses in the system. These include limited domestic manufacturing capacity and increased vulnerability to volatile short-term capital flows. To sustain this positive momentum, monetary and fiscal authorities must work in close coordination. The CBN and the Federal Government should introduce targeted tax incentives, improve trade and export logistics, and strengthen the competitiveness of the non-oil export sector to promote sustainable autonomous FX earnings over the long term. In addition, maintaining a transparent, market-reflective exchange rate regime, supported by effective regulatory oversight, will help reduce exchange rate volatility, enhance investor confidence, and channel capital inflows into productive sectors of the economy rather than speculative activities.

The Central Bank of Nigeria (CBN) in its 306th Monetary Policy Committee (MPC) meeting, held on 20 and 21 July 2026, decided to retain the Monetary Policy Rate (MPR) at 26.5%, the Standing Facilities Corridor around the MPR at +50/-450 basis points, the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45%, for Merchant Banks at 16%, and non TSA public sector deposits at 75%. The Committee maintained a cautious monetary policy stance, despite a marginal moderation in headline inflation in June 2026, citing global uncertainties due to renewed hostilities in the Middle East. The MPC noted the risk of pass through to domestic inflation from spillovers to global energy prices due to the conflict, while acknowledging the Nigerian economy’s resilience to external shocks. By retaining the MPR, the CBN signalled continued restraint on liquidity and credit growth to consolidate disinflation and exchange rate stability, even though this may keep lending rates high in the near term. By holding the policy rate, the CBN signalled that it is waiting for clearer signs of price stability before easing rates. To further bolster the economy against external shocks, alongside maintaining stable prices, the CBN should boost external reserves by improving FX market transparency and liquidity to reduce volatility, strengthen prudential supervision to ensure banks maintain adequate capital and liquidity buffers, and coordinate with fiscal authorities to align monetary and fiscal actions in support of macroeconomic stability. Furthermore, targeted grants for local production are needed to reduce production costs and, in turn, lower prices.

According to the National Bureau of Statistics (NBS), Nigeria's headline inflation rate stood at 15.91% year-on-year in June 2026, remaining considerably lower than the 25.29% recorded in June 2025 and easing slightly from 15.93% in May 2026. The Consumer Price Index (CPI) increased to 143.0 from 140.7 in the previous month, while month-on-month headline inflation moderated to 1.66%, down from 1.75% in May. In contrast, food inflation accelerated, rising from 2.98% month-on-month in May to 3.75% in June, an increase of 0.77 percentage points, and reached 17.52% on a year-on-year basis. This increase is attributed primarily to higher prices of fresh tomatoes, dried green peas, beef, cassava flour, and garri, among other food items. Furthermore, food and non-alcoholic beverages remained the largest contributors to headline inflation, accounting for 6.37 percentage points of the year-on-year rate and 0.66 percentage points on a month-on-month basis. Consequently, the marginal 0.02 percentage-point decline in headline inflation provides little relief to households, as the moderation has been driven largely by the core basket. In contrast, the food basket, which constitutes a significant share of household expenditure for the average Nigerian, continues to experience upward price pressures, which, in turn, is likely to affect households’ consumption and ultimately their welfare.Therefore, the government should strengthen farm-to-market infrastructure, particularly road networks, and expand storage facilities in surplus-producing states. Such measures would help reduce interstate disparities in food prices and contribute to greater price stability across the country.

According to the International Monetary Fund's (IMF) July 2026 World Economic Outlook (WEO) Update, Nigeria's economic growth projection remains unchanged at 4.1% in 2026 and 4.3% in 2027, despite heightened global uncertainty arising from the ongoing conflict in the Middle East and disruptions to global energy markets. The IMF projects that growth in Sub-Saharan Africa will remain at 4.3% in 2026 and improve to 4.5% in 2027. However, growth prospects across the region vary significantly, depending on the individual countries' policy space, reform implementation, and exposure to external shocks. For Nigeria, improved macroeconomic stability and favourable terms-of[1]trade effects are expected to support economic growth, although higher prices for essential goods are likely to worsen poverty and food insecurity. While the stable growth outlook suggests that recent macroeconomic reforms are supporting economic resilience, rising living costs and food prices remain significant risks to inclusive growth. To sustain growth and cushion households from these pressures, the government should prioritise measures that boost domestic food production, improve agricultural productivity, and strengthen targeted social protection programmes. The government must also sustain reforms that ensure macroeconomic stability and encourage private investment through providing an enabling environment.

According to the National Bureau of Statistics (NBS), Nigerian commuters faced heightened transport costs across all major modes in May 2026. Specifically, the average fare for an intra[1]city bus journey increased by 2.43% month-on-month to ₦1,431.25, representing a significant 38.63% year-on-year surge. Similarly, intercity bus fares per drop climbed to ₦9,699.55, reflecting a 0.96% month-on-month increase, and a 21.89% year-on-year increase. Furthermore, motorcycle (Okada) transport witnessed the steepest annual jump, with average fares soaring by 52.45% year-on-year to reach ₦1,072.51. Likewise, air travel and waterway passenger transport were not spared, recording year-on-year fare increases of 20.86% and 30.88%, respectively. The current surge in transport costs across all modes of transportation can largely be attributed to the increase in crude oil prices on the international market, driven by the ongoing conflict in the Middle East. This has, in turn, led to higher petroleum product prices. Consequently, financial pressures on households have likewise surged, as commuting expenses consume an increasingly larger share of disposable income. Moreover, these rising logistical costs inevitably cascade into the broader economy, increasing the prices of goods and services and fueling overall inflationary momentum. Therefore, the government must urgently prioritise targeted interventions to alleviate these pressures, such as deploying subsidised mass transit schemes across heavily populated urban centres. Ultimately, accelerating investments in alternative transportation infrastructure, particularly rail and inland waterways, will sustainably reduce the overreliance on expensive road transport.