The Central Bank of Nigeria (CBN) has projected that the country’s External Reserves will climb to $51.04 billion in 2026, up from $45 billion in 2025.
In a recently published outlook by CBN titled ‘Consolidating Macroeconomic Stability Amid Global Uncertainty’, the apex bank stated thus:
“The external reserves are projected at $51.04bn in 2026, compared with $45.01bn in 2025. The external reserves are expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflows.
“Additionally, Dangote refinery’s expansion of its nameplate capacity to 700,000 bpd from 650,000 bpd in 2025 and eventually to 1.4 million bpd in the medium term would further support the growth in external reserves”
“As the monetary authority of Nigeria, the Bank remains steadfast in achieving its core mandate of price stability while promoting sustainable development and fostering economic resilience”
“The Bank will sustain its regulatory oversight and commitment to ensuring that policies are timely, data-driven, and supportive of a stable macroeconomic environment”.
“Inflation is expected to continue its downward trend in 2026. The inflation outlook is predicated on continued stability in the foreign exchange and energy markets, the lagged effect of previous rate hikes, and improved policy coordination.
“Headline inflation is projected to further decelerate to 12.94 per cent in 2026 from 21.26 per cent estimated for 2025. The anticipated moderation would be driven by declining food and premium motor spirit prices. The expected deceleration in PMS prices would be driven by increasing competition within the midstream segment of the oil industry.
“Furthermore, the anticipated faster decline in food prices is expected to drive the slower pace of inflation. This would be on account of the expected increase in food supply following the launch of various agriculture sector-based policies, improved security in major food-producing regions, and favourable weather conditions.”
“In line with its price stability mandate, the Bank will deploy appropriate tools to anchor expectations, foster financial stability, and promote confidence in the economy.
The trajectory of monetary aggregates in 2026 is expected to be influenced by external conditions and fiscal operations.
Changes in the naira value of foreign currency deposits, arising from exchange rate movements, will continue to influence monetary aggregates.
Nevertheless, the Bank’s policy stance, complemented by measures to stabilise the foreign exchange market, is expected to moderate the growth rate of monetary aggregates in 2026,” the bank said.
“However, downside risks persist. A sustained decline in global oil prices below the budget benchmark and an unexpected reduction in oil production could undermine projected oil revenues.
“Elevated debt service obligations, extra-budgetary spending, and a potential rise in statutory transfers due to pre-election spending could further constrain the fiscal space.
“The fiscal outlook for 2026 is vulnerable to various risk factors. Notably, a budget risk could crystallise if crude oil prices and domestic production fall below benchmarks, thereby dampening the optimism about oil revenue contribution (57.01 per cent) to the total revenue outcome in 2026.
“Although crude oil production is expected to ramp up in the near term, the domestic oil sector remains sensitive to global shocks. The expectation of a strong non-oil revenue performance in 2026 is hinged on the successful implementation of the Nigeria Tax Act, 2025, and the sustenance of the ongoing tax effort.
“However, low tax awareness and compliance levels, as well as gaps in tax administration systems, remain significant risks to tax revenue projections”
“Rising NPLs pose a direct threat to banks’ profitability, credit availability, and overall risk-bearing capacity.
“This underscores the need to sustain measures to ensure that worsening NPLs do not weaken banks’ balance sheets, impair asset quality, and trigger systemic contagion. Although recent gains in capital adequacy and liquidity ratios provide a buffer, these indicators remain susceptible to unforeseen macroeconomic shocks.
“An increase in credit losses or foreign exchange illiquidity could erode capital reserves, breach prudential thresholds, and strain liquidity coverage. These conditions could disrupt financial intermediation, diminish market confidence, and amplify vulnerabilities across the banking sector.”