Nigeria economic outlook faces risks from insecurity and productivity gaps

The Nigerian Economic Summit Group (NESG) has issued a warning regarding Nigeria’s economic growth outlook for the second half of 2026. In its H1 2026 State of the Economy report, the group identified several risks that could undermine macroeconomic stability and investor confidence, including persistent insecurity, climate-related disruptions, and rising political activities leading up to the 2027 general elections.

External factors such as global geopolitical shocks, trade tensions, and tighter financial conditions also pose threats. A slowdown in global growth could reduce export earnings and foreign exchange inflows, while an easing of geopolitical tensions might lower crude oil prices, impacting government revenue. Conversely, escalating conflicts could increase global inflation and tighten external financing.

Complementing these concerns, analysts highlight a critical productivity gap within the Nigerian economy. While nominal output has grown due to population increases, oil earnings, and government spending, the efficiency of labor and capital deployment has not kept pace. This disconnect means economic expansion has not significantly improved living standards or incomes for many citizens. World Bank projections suggest that despite economic growth, more than half of the population could remain below the poverty line.