Macroeconomic Report & Economic Updates

According to data gathered from the Central Bank of Nigeria (CBN), the price of Nigeria’s crude oil rose to US$75.03 per barrel on 29 January 2026, reaching the highest level since 30 September 2025. Prices gained over $4 per barrel, representing an approximate 5% increase, as Brent and other benchmarks extended gains for a third consecutive session. The surge was driven largely by rising fears over possible supply disruptions from the Middle East, particularly along strategic routes such as the Strait of Hormuz. The price spike has significant implications for Nigeria’s economy, given its reliance on oil revenues. Higher crude prices could bolster government revenue and foreign exchange inflows, strengthen reserve buffers, and provide fiscal space for public expenditure. However, ongoing geopolitical risks may also introduce volatility, affecting market stability and planning for oil-dependent sectors, which increases the need for diversification of the economy. From a policy perspective, maintaining prudent fiscal and reserve management is essential to maximise benefits from the rally while mitigating risks from potential price swings. Monitoring global oil markets and adjusting production and export strategies will be key to optimising gains.

The Nigerian Exchange (NGX) weekly report for January 16, 2026, showed that the NGX All-Share Index (ASI) rose by 2.36%, closing at 166,129.50 points, while market capitalisation increased by 2.48% to ₦106.354 trillion. The gain signifies strong market activity and increased participation in equities and exchange-traded products. Furthermore, investors traded a total of 4.607 billion shares, valued at ₦130.636 billion, across 263,439 deals in the week under review, up from 4.164 billion shares worth ₦94.026 billion in 248,254 deals recorded in the preceding week. The financial services sector led the activity chart, accounting for 3.126 billion shares valued at ₦47.2 billion across 94,186 deals, contributing 67.8% to the total equity turnover volume and 36.2% to the total equity turnover value. The services sector followed with 353.4 million shares worth ₦5.1 billion in 17,764 deals, while the ICT sector came third with 277.3 million shares valued at ₦18.0 billion across 28,525 deals. The rise in equities indicates that investors are regaining confidence in the market, likely driven by expectations of stable economic conditions and strong corporate earnings. To build on the positive market momentum, policymakers should ensure well communicated monetary and fiscal policies, enhance transparency in corporate reporting, and strengthen investor protection measures. Proactive steps in these areas will help sustain market confidence, encourage broader participation, and attract long-term capital to the equity market. 

Nigeria's GDP growth in 2025 shows a clear upward trend, rising from 3.13% in Ql to 4.23% in Q2, before moderating to 3.98% in Q3, which is 0.12 percentage points higher than Q3 2024.This sustained growth was driven mainly by the non-oil sector, which accounted for over 96% of real output, with sector wide gains in agriculture, industry, and services. This growth rate aligns IMF's October 2025 upward revision of Nigeria's GDP growth forecast to 3.9% in 2025 and 4.2°k in 2026, supported by improved oil production, stronger investor confidence, and a more supportive fiscal stance. However, persistent inflation and structural bottlenecks in the power, transport and security sectors highlight the need for diversification into manufacturing, agriculture and digital services, alongside macroeconomic and regulatory reforms to sustain economic recovery.

According to the National Bureau of Statistics (NBS), the Federation Account Allocation Committee (FAAC) disbursed a total of ₦2.93 trillion to the three tiers of government in November 2025 from the total revenue generated in October 2025. This comprised ₦2.16 trillion from the Statutory Account, ₦49.87 billion from Electronic Money Transfer Levy (EMTL), and ₦719.83 billion from Value Added Tax (VAT). Of the total allocation, the federal government received ₦758.41 billion, state governments ₦689.12 billion, and local governments ₦505.80 billion, while ₦141.39 billion was distributed to oil-producing states from the 13% derivation fund. These allocations reveal that effective revenue mobilisation and timely disbursement are essential for sustaining public service delivery. However, boosting internal revenue mobilisation is very crucial at the subnational level to reduce dependence on FAAC, as most states are largely dependent on FAAC. Thus, there is a need to create an enabling environment for businesses in states to attract investment, which will translate to more tax revenue mobilised at the state and local government levels. To consolidate the current gains in revenue mobilisation, policymakers should strengthen revenue collection efficiency through the digitalisation of tax processes, enhance transparency, and expand non-oil revenue sources. Ensuring there is improved fiscal planning will help stabilise both national and subnational finances, which will support development initiatives across the federation.

Data from the Nigerian Foreign Exchange Market (NFEM), published by the Central Bank of Nigeria (CBN), showed that the naira appreciated by 7.4% in 2025.