The Nigerian economy is on track for significant growth in the coming years, according to Bismarck Rewane, Managing Director/Chief Executive Officer of Financial Derivatives Company Limited (FDC).
Rewane, speaking at the Access Bank Customer Forum, projected that the economy would expand by 3.5% by 2026, pushing the country’s Gross Domestic Product (GDP) to approximately $400 billion. This growth trajectory would solidify Nigeria’s position as the second-largest economy in Sub-Saharan Africa.
Rewane also shared other positive projections. He predicted that unencumbered foreign reserves would reach $20 billion, improving the efficiency of the foreign exchange auction system. Inflation is expected to decline to 22% by 2026, leading to a reduction in the Monetary Policy Rate (MPR) and a decrease in bad loans within the banking sector.
The naira is predicted to trade at N1,550 to the dollar in the parallel market, driven by intervention funds, diaspora remittances, and exchange rate policy adjustments. Total factor productivity is expected to increase to 2.6% by 2026, up from 2.4% in 2024. The trade balance is projected to rise to $9.3 billion from $8.42 billion. Prices of essential goods like tomatoes, rice, and beans are expected to stabilize at N20,000, N75,000, and N110,000 per bag, respectively.
While the outlook for Nigeria’s economy is positive, Rewane cautioned that inflation remains a significant challenge for businesses. He also noted that the country’s currency has depreciated significantly compared to the Kenyan shilling, highlighting the need for data-driven decision-making.
The Nigerian government has taken steps to support economic growth, including intervening in the foreign exchange market, increasing revenue generation, and investing in infrastructure.
Overall, Nigeria’s economy is poised for growth, but addressing challenges such as inflation and currency depreciation remains crucial.
