-
The Nigerian Economic Summit Group projects Nigeria’s external reserves will rise to about $53bn by December 2026, supported by stronger oil production, favourable crude prices and improved foreign exchange inflows.
-
NESG expects the economy to grow by 4.2 percent in 2026, although inflation is projected to remain elevated at an average of 15.5 percent amid food, transport and seasonal pressures.
-
The group is urging the Federal Government to mobilise more private and institutional “patient capital” for industrialisation rather than relying heavily on public funds.
August 21, (THEWILL) — Nigeria’s external reserves could rise to about $53 billion by the end of 2026 as the country’s external sector remains resilient and foreign exchange liquidity improves, the Nigerian Economic Summit Group (NESG) has projected.
The projection was contained in the group’s second-half 2026 Economic Outlook presented on Wednesday at the Nigerian Industrialisation and Competitiveness Forum in Lagos.
Interim Director of Research and Development at the NESG, Dr Joseph Ogebe, said the naira was also expected to remain broadly stable during the second half of the year.
“The external sector is expected to remain resilient during H2-2026, with the naira broadly stable and the external reserves projected to increase to about US$53bn by year-end,” Ogebe said.
Oil, Exports to Drive Reserve Growth
Ogebe attributed the expected accumulation of reserves to higher crude oil production, favourable oil prices, stronger non-oil exports and sustained current account surpluses.
He said improved investor confidence, higher foreign portfolio inflows and stronger diaspora remittances would also support foreign exchange liquidity, alongside continued reforms in the FX market.
According to him, monetary policy discipline and a narrower gap between the official and parallel exchange rates should help reduce speculative demand and promote greater transparency in the foreign exchange market.
The projection comes as Nigeria continues efforts to strengthen its external position and rebuild reserve buffers through higher foreign exchange earnings and improved market confidence.
However, the NESG expects inflationary pressures to remain significant through the rest of the year.
Ogebe projected headline inflation to average 15.5 percent in the second half and for the full year, citing insecurity in farming communities, flooding, elevated transportation costs, election-related spending and increased festive-season demand as key risks.
Despite these pressures, the group expects economic growth to strengthen.
It projects second-half GDP growth of 4.5 percent, taking full-year growth to about 4.2 percent, with oil, manufacturing, agriculture and services expected to drive the expansion.
Ogebe said increased domestic refining activity should support industrial output and reduce dependence on imported refined petroleum products, while improved FX liquidity and easing inflationary pressures could help manufacturers address production constraints.
NESG Calls for More Patient Capital
Chairman of the NESG, Olaniyi Yusuf, said Nigeria’s economic transformation would depend on reducing its vulnerability to global supply-chain disruptions and hydrocarbon dependence.
He argued that the country needed to build a stronger non-oil export base and expand domestic productive capacity.
“Without a more diversified and competitive industrial sector, Nigeria will remain heavily reliant on imported intermediate inputs and finished manufactured goods, leaving the economy vulnerable to external shocks,” Yusuf said.
He described rapid industrialisation as an economic necessity, noting that manufacturing contributed about 10 percent of Nigeria’s GDP but accounted for only 1.4 percent of exports in the first quarter of 2026.
READ ALSO:
Yusuf said the African Continental Free Trade Area offered Nigerian businesses access to a market of more than one billion people, but warned that market access would have limited impact without stronger domestic production capacity.
“We must build the productive capacity to take advantage of that market,” he said.
Referencing the NESG’s 2026 Half-Year Macroeconomic Outlook Report, Yusuf said Nigeria needed stronger institutions, infrastructure, skills, technology, finance and macroeconomic stability to close its industrialisation gap with countries such as China, South Korea and Vietnam.
He urged the Federal Government to ensure that the Nigeria Industrial Policy 2025 avoids the weak coordination, poor execution and inadequate monitoring that affected previous industrial strategies.
While acknowledging industrial finance as a priority, Yusuf called for a shift towards mobilising diverse sources of long-term capital.
He said development finance institutions should be strengthened, while blended finance, credit enhancement mechanisms and greater private-sector participation should be used to direct funding towards manufacturers and MSMEs with strong employment and export potential.
Meanwhile, Professor Stefan Dercon of the University of Oxford said Nigeria’s structural transformation would require a stronger coalition among political, business and traditional elites.
He argued that countries that successfully industrialised were able to build coalitions that supported long-term reforms rather than short-term interests.
Dercon said Nigeria’s recent reforms, including exchange-rate unification, fuel subsidy removal and tariff adjustments, represented painful but necessary stabilisation measures.
He urged the government to focus on a limited number of consistent priorities and ensure that reforms benefit a broad range of economic interests.
He also cautioned against simply copying the development models of South Korea, China and Japan, arguing that Nigeria must build the institutional foundations required to support its own long-term economic transformation.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
