Nigeria’s Growth Outlook Improves as Currency Stability Draws Investor Interest

Nigeria’s economy is projected to grow by 4.1% in 2026, according to the International Monetary Fund, with annual growth expected to remain above 4% through 2030. Services and other non-oil industries are expected to lead the expansion.

The naira remained relatively stable in October, with the official exchange rate moving from about ₦1,329 per dollar at the end of September to around ₦1,333 by October 19, according to Central Bank of Nigeria data.

JPMorgan Chase is seeking a Nigerian merchant-banking licence and has reportedly deposited ₦50 billion with the central bank as part of its application.

Approval would allow the American bank to expand beyond its existing Lagos representative office and compete for corporate banking business.

Nigeria’s prospects for sustained growth will depend on investment in industries capable of increasing production.

Unreliable electricity, high transport costs and expensive credit remain obstacles to business expansion.

Services and Non-Oil Industries Lead Nigeria’s Economic Growth

Nigeria’s real GDP grew by 4.43% in the second quarter of 2026, compared with 3.89% in the previous quarter, according to the National Bureau of Statistics.

Services contributed 2.60 percentage points to growth, followed by agriculture at 1.15 points and industry at 0.69 points.

Telecommunications and information services made the largest contribution among individual activities at 0.96 percentage points. Trade added 0.44 points despite accounting for a larger share of total economic output.

The non-oil economy expanded by 4.31% and accounted for 95.84% of real GDP. The IMF expects non-oil, non-agricultural output to grow faster than the wider economy through much of the period to 2030.

MTN Nigeria spent ₦620.5 billion on capital expenditure, excluding leases, during the first half of 2026, covering network expansion and telecommunications infrastructure.

Crude oil production averaged 1.72 million barrels per day in the second quarter, compared with 1.55 million in the first. Oil-sector output grew by 7.31% and accounted for 4.16% of real GDP.

Seplat Energy reported $109.8 million in cash capital expenditure during the first half of 2026, with further spending planned for the remainder of the year.

The latest GDP figures place telecommunications among the strongest contributors to growth, while capital expenditure by MTN and Seplat points to continued investment in communications and energy infrastructure.

Foreign Capital Returns to Nigeria, but Direct Investment Remains Limited

Nigeria attracted $10.37 billion in foreign capital during the first quarter of 2026, up 83.8% from a year earlier, according to the National Bureau of Statistics. Portfolio investment accounted for $9.86 billion, or 95.1% of total inflows.

Foreign investors placed $6.50 billion in money-market instruments and $3.23 billion in bonds.

Equity investment reached $131.81 million, while foreign direct investment amounted to $135.08 million, representing 1.3% of the total.

Nigeria’s external reserves stood at approximately $55.07 billion on October 9, according to revised Central Bank of Nigeria figures.

Banking received $7.55 billion in foreign capital during the first quarter, compared with $152.27 million recorded for production and manufacturing.

JPMorgan Chase is seeking approval to establish merchant-banking operations in Nigeria, expanding its existing presence in the country.

The proposed operation would allow the American bank to compete for corporate financing business, subject to regulatory approval.

At the Nigeria Investors Forum in Bangkok on October 14, the Federal Government presented 65 projects seeking $78.5 billion in financing.

The projects included $36.4 billion in oil, gas and power investments and $25 billion in transport and maritime infrastructure.

Among the projects seeking financing are the proposed $1.29 billion Lagos Greenline Railway and a $2.69 billion ammonia and phosphate fertiliser project.

Electricity, Transport and Borrowing Costs Restrict Nigeria’s Industrial Growth

Nigeria’s grid-connected power plants averaged 4,758 megawatts of available capacity in August 2026, according to the Nigerian Electricity Regulatory Commission. Average generation utilised was 4,102 megawatts.

Diesel prices reached about ₦2,100 per litre in parts of Lagos and Ogun in September, raising the cost of generator-powered electricity for manufacturers.

The Manufacturers Association of Nigeria has reported that power expenses account for more than half of operating costs at some factories.

In May, the Presidential Enabling Business Environment Council removed illegal checkpoints along the Apapa port corridor following complaints from truck operators about extortion and delays. Congestion around Lagos ports continues to affect cargo movement.

The government began introducing its National Single Window trade platform in March to simplify cargo clearance procedures.

Central Bank of Nigeria figures for August put the average prime lending rate at 17.86% and the average maximum lending rate at 29.20%. The CBN subsequently reduced its monetary policy rate to 23% in September.

Nigeria’s Currency Stability Sets the Stage for Growth Through 2030

Nigeria’s more stable exchange rate has eased one of the uncertainties facing businesses and foreign investors.

Continued stability would give companies greater confidence to plan investment as the economy expands through 2030.

Global energy prices remain a risk. Higher fuel costs can increase transport and food prices, putting pressure on household budgets even if the naira holds its value.

Electricity shortages and expensive credit also continue to affect businesses planning new projects.

The outlook now rests on whether Nigeria can maintain currency stability while expanding domestic production.

Stronger industrial activity and lower operating costs would allow more businesses to invest, increase employment and support growth beyond the current recovery.