CardinalStone cuts Nigeria’s 2026 economic growth forecast to 4.2%
Investment firm CardinalStone has lowered Nigeria’s 2026 economic growth forecast to 4.2 per cent, down from 4.4 per cent, citing weaker-than-expected performance in services, particularly trade and real estate, amid elevated inflation and interest rates.
In its mid-year report “2026 Economic Outlook: Steady Hands on Shifting Grounds”, the firm noted that while macro fundamentals remain relatively strong, output growth has yet to translate into significant gains for households. Employment elasticity was put at 0.74, with labour productivity at just $0.94 per hour.
CardinalStone expects inflationary pressures to ease in the second half of 2026, with average month-on-month inflation moderating to 1.1 per cent, compared with 1.5 per cent in the first half. However, annual inflation is projected to remain elevated at 16.3 per cent, up from 15.5 per cent earlier in the year.
The firm forecasts that the Central Bank of Nigeria (CBN) will maintain its tight monetary stance until after the 2027 general elections, delaying rate cuts until then. It projects cumulative interest rate reductions of 500–700 basis points between 2027 and 2028.
Since January, the CBN has withdrawn an estimated ₦59.3 trillion from the financial system, slowing broad money supply growth to 8.4 per cent year-on-year in May, well below the five-year average of 28 per cent.
On oil, CardinalStone said Nigeria’s fiscal gains have been limited despite prices averaging US$101.89 per barrel between March and May 2026, as production of 1.60 million barrels per day fell short of the budget benchmark of 1.84 million.
The government’s oil revenue windfall was estimated at ₦256 billion. For the full year, output is projected at 1.67 million barrels per day, slightly higher than 2025 levels.
Nigeria’s external sector remains resilient, with a current account surplus of US$5 billion in Q1 2026 and a full-year surplus projected at US$22.7 billion (5.9 per cent of GDP). The naira has largely traded within the projected range of ₦1,350–₦1,450 per dollar.
CardinalStone concluded that while Nigeria’s macroeconomic position has strengthened, policymakers must ensure growth translates into broader improvements in jobs, incomes, and living standards through sustained reforms and productivity gains.
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