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In recent years, Nigeria’s cigarette excise tax structure has improved, especially through the introduction of a mixed tax structure. Since 2018, the government has introduced several tax policy changes, including adopting a mixed structure that combines specific excise taxes with existing ad valorem taxation. The most recent changes were in 2026 with the introduction of a three-year excise schedule (2026–2028) under the Fiscal Policy Measures (FPM), setting the specific excise tax at ₦6.00 per stick in 2026, with rates scheduled to increase to ₦7.00 in 2027 and ₦8.00 in 2028, while maintaining a 30% ad valorem tax on the cost of production. However, this level of taxation is still below the recommendations of both the WHO and ECOWAS. The current tax regime remains insufficient to substantially reduce cigarette affordability, curb tobacco consumption, and maximise the fiscal and public health benefits that stronger tobacco taxation can deliver. 

This brief was authored by:
Clinton Essang, Boluwatife Alayande, Halimat Abdulrazaq

Recent evidence suggests that the Nigerian economy has entered 2026 with the weight of a hard-won stabilisation and rising structural fragility. This transition follows the Central Bank of Nigeria (CBN) implementation of several reforms since March 2023. Specifically, the CBN cleared the $7 billion backlog of verified foreign exchange obligations. Inherited in September 2023, settling the residual balance and announcing full clearance in March 2024, following an independent audit by Deloitte Consulting to verify the legitimacy of claims. The CBN also launched a banking sector recapitalisation programme in March 2024, requiring banks to meet substantially higher minimum paid-up share capital thresholds by 31 March 2026.” At the close of the programme, the Nigerian Securities and Exchange Commission (SEC) confirmed that 33 of Nigeria’s 37 banks had met the revised minimum capital requirements, with N4.65 trillion raised in aggregate. 
It also allowed the naira to float under a unified, market-driven foreign exchange framework. In addition, the removal of the long-standing fuel subsidy to eliminate a structural fiscal drain also created conditions that generated substantial inflationary pressure.” Moreover, evidence indicates that the foreign exchange reserves recovered substantially, inflation began moderating after a substantial spike, and the manufacturing sector posted predominantly expansionary but uneven PMI readings throughout 2025.
However, analysis points out that Nigeria’s Central Bank now faces a dilemma that those reforms could not resolve. On the one hand, consistently raising monetary policy rates compounds and starves productive investment in real sectors already under severe structural constraints. On the other hand, cutting policy rates risks capital flight. In this light, this article argues that the interaction effects of the four unresolved structural failures in Nigeria’s financial sector, energy sector, manufacturing sector, and fiscal policy have made the monetary policy rate (MPR) a blunt and often less effective instrument.

According to the Central Bank of Nigeria’s (CBN) August 2026 Business Expectations Survey (BES) report, business confidence strengthened significantly, with the Business Confidence Index (BCI) rising to 14.8 points from 5.7 index points in July. The improvement was broad-based, with confidence increasing in industry (17.1 from 11.5), agriculture (13.9 from 3.4) and services (13.3 from 3.6). Respondents identified increased demand (25.9%), economic diversification (18.3%) and monetary policy (14.2%) as the main drivers of improved sentiment. Confidence is expected to strengthen further, reaching 23.6 points in September, 30.1 in November and 36.1 by February 2027. Despite this positive outlook, high taxation (67.8 points), insecurity (66.9 points) and high interest rates (63.5 points) remain major constraints on business activity. These challenges could limit firms’ ability to translate stronger confidence and demand expectations into investment, production and employment. The government should therefore focus on converting improved sentiment into realised economic activity. First, fiscal authorities should harmonise business[1]related taxes across government levels and eliminate overlapping levies. Second, targeted credit-guarantee and risk[1]sharing schemes should be expanded to reduce financing constraints for productive firms, particularly SMEs. Third, security agencies should prioritise agricultural zones, industrial clusters and major transport corridors to minimise disruptions to production and trade. Finally, monetary and fiscal authorities should strengthen policy coordination and communication to improve the predictability of the business environment.

According to the National Bureau of Statistics' (NBS) Foreign Trade in Goods Statistics report for Q2 2026, Nigeria's total merchandise trade stood at ₦41.44 trillion in the second quarter of 2026, representing an increase of 5.61% from the ₦39.24 trillion recorded in the corresponding quarter of 2025 and a rise of 19.13% from ₦34.79 trillion in Q1 2026. This growth was driven by a surge in export earnings alongside continued compression in imports. During Q2 2026, total exports were valued at ₦27.02 trillion, accounting for 65.20% of total merchandise trade, while imports amounted to ₦14.42 trillion (34.80% of total trade), declining by 12.55% year-on-year from ₦16.49 trillion in Q2 2025. A notable development is that non[1]crude oil exports, valued at ₦14.11 trillion, exceeded crude oil exports of ₦12.91 trillion for the first time, with non-oil products contributing ₦3.72 trillion, or 13.80%, of total exports. While the improvement in the trade surplus and the rise in non-crude oil exports are encouraging, non-oil products still account for only 13.80% of total exports, and import dependence in manufactured goods remains deeply rooted. Policy efforts should therefore focus on strengthening non-oil export performance through improved value addition and domestic production capacity, while deepening backward integration in manufacturing and expanding incentives for agro-processing and solid minerals to build a more resilient external sector.

According to the National Bureau of Statistics (NBS), Nigeria's real Gross Domestic Product (GDP) grew by 4.43% year-on[1]year in the second quarter of 2026, up from 4.23% in the corresponding quarter of 2025. This growth was driven primarily by the services sector, which expanded by 4.60% and accounted for 56.62% of aggregate real GDP. The agricultural sector also recorded strong growth, growing by 4.39%, compared with 2.82% in the same quarter of the previous year. In the oil sector, real output increased by 7.31% year-on-year, supported by an increase in average daily crude oil production of 1.72 million barrels per day. In contrast, industrial growth declined to 3.96%, down from 7.46% in the second quarter of 2025, while the non[1]oil sector expanded by 4.31% in real terms. These figures demonstrate the resilience of the Nigerian economy, with growth largely driven by the services, agriculture, and oil sectors. However, the slowdown in industrial growth points to persistent structural and operational challenges that require policy attention to ensure balanced and sustainable economic development. Moreover, the non-oil sector's contribution of 95.84% to real GDP underscores its pivotal role as the principal driver of economic activity. To sustain this growth momentum, the government should implement targeted policies aimed at revitalising the manufacturing and broader industrial sectors. Increased investment in agricultural infrastructure, alongside improved security in farming communities, will be essential to consolidate recent gains in agricultural productivity. At the same time, maintaining stable crude oil production while fostering a conducive business environment for the services and non-oil sectors will be cri economic growth.

A press release from the Bank of Industry (BOI) on 17 August 2026 confirmed the successful debut in Nigeria’s domestic capital markets, with its ₦250 billion Series 1 Fixed Rate Bond oversubscribed. Issued through BOI Financing SPV Plc under the Bank’s US$1 billion Multi-Currency Instruments Programme, the transaction achieved robust price discovery, amid strong institutional investor appetite. BOI’s Managing Director/CEO highlighted that the outcome demonstrates the domestic market’s ability to support development financing at scale and described the investor response as a vote of confidence in both BOI and Nigeria’s capacity to mobilise long-term capital for productive investment. To sustain this momentum, BOI should prioritise the swift deployment of proceeds toward high-impact industrial projects with clearly defined metrics for job creation and value-chain development, while publishing quarterly disbursement and impact reports to maintain investor confidence. Concurrently, the Bank should deepen its engagement with domestic institutional investors including pension funds, insurers, and asset managers through targeted and structured product offerings. This approach will broaden the investor base, lower future funding costs for development finance, and establish a more durable foundation for mobilising domestic savings for long-term development initiatives.

According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria exceeded its OPEC crude oil production quota of 1.5 million barrels per day (mbpd) for the third consecutive month in July 2026, producing 1.505 mbpd of crude oil and 0.17 mbpd of condensates, resulting in a combined output of 1.67 mbpd. However, total production declined by approximately 4% month-on-month, largely due to operational disruptions at the Erha and Akpo assets. Despite these setbacks, relatively stable operations at the Forcados, Bonny, Qua Iboe, Escravos and Bonga terminals indicate some degree of resilience within the wider oil-producing system. The ability to maintain production above the OPEC quota despite asset[1]specific disruptions is encouraging, particularly given the importance of crude oil production to government revenues, export earnings and foreign-exchange liquidity. However, the month-on-month decline also shows the vulnerability of aggregate production to disruptions at individual high-output assets. Sustaining the recent improvement therefore requires not only maintaining production at operational fields but also reducing unplanned downtime and accelerating the restoration of impaired capacity. The NUPRC and relevant industry stakeholders should strengthen proactive asset maintenance, production monitoring and rapid[1]addressing operational disruptions.

The African Continental Free Trade Area (AfCFTA), Africa's landmark regional trade agreement, has the potential to expand intra-African trade and create new economic opportunities, including for women traders. However, achieving these gains requires more than reducing tariffs. Women traders continue to face persistent barriers to participation, including limited access to information, weak institutional support, and concerns about the safety and governance of digital trade systems. This policy brief draws on findings from a randomised survey experiment involving 586 women traders in Lagos and Abuja, Nigeria. The study examined whether providing information about the AfCFTA, with and without additional messaging on data governance and digital privacy, influenced women's trust in digital trade systems and willingness to engage in cross-border trade. The findings show that AfCFTA information increased women's confidence in digital trade systems but did not increase their willingness to trade. When information on data governance and digital privacy was added, both digital trust and willingness to trade declined. These findings suggest that awareness alone is insufficient to increase women's participation in AfCFTA-enabled trade. Strengthening data governance, building trust in digital trade infrastructure, and ensuring gender-responsive institutional protections are essential for inclusive AfCFTA implementation.

This brief was authored by:
Evans Osabuohien, Professor of Economics at Covenant University, Ota 
and Thelma Obiakor, Research Fellow at CSEA.

According to the Nigerian Exchange (NGX) weekly report for July 31st, 2026, the NGX All-Share Index (ASI) declined by 0.84% to close at 245,283.68, while market capitalisation stood at ₦158.326 trillion, a 0.79% decline over the week. Despite the decline in the market's overall performance, trading activity strengthened, with investors exchanging 5.119 billion shares valued at ₦404.762 billion across 285,223 deals, compared to 4.433 billion shares worth ₦306.143 billion traded in 255,589 deals in the preceding week. The financial services industry dominated trading activity, accounting for 3.918 billion shares valued at ₦271.428 billion across 123,514 deals, representing 76.55% of total equity turnover volume and 67.06% of total equity turnover value. The services industry followed with 203.203 million shares worth ₦3.061 billion, while the consumer goods industry ranked third with 191.283 million shares valued at ₦13.203 billion. Although the decline in the ASI and market capitalisation indicates weaker market performance during the week, the increase in trading volume and value suggests that investor participation remained strong despite the downturn. To support market stability and sustain investor confidence, policymakers should sustain reforms that improve market transparency and corporate disclosures while encouraging long[1]term institutional investment. This would help strengthen demand for equities and improve overall market stability. A stable policy environment is also necessary to attract investments.