Nigeria's Economy Faces Inflation Surge, Slower Growth and Election‑Related Market Risks

Nigeria’s equity market, still buoyant after a 50‑plus percent rally in the first half of 2024, could see further upside in the second half if the anticipated listing of Dangote Refinery proceeds, according to CardinalStone Securities analyst Abdulahi Rufai. However, investment research firm GTI warned that political uncertainty ahead of the 2027 general elections often curtails stock‑market momentum from June to October, suggesting a possible downturn in that period.

S&P Global revised its outlook for Nigeria, cutting projected real GDP growth to 3.7% for 2026 and 3.5% for 2027 and raising the inflation forecast for 2026 to 16.9%, the highest among emerging‑market peers. The downgrade reflects persistent price pressure from higher energy and food costs, as well as the pass‑through of international oil prices.

In the fixed‑income market, Treasury‑bill yields rose 27 basis points to an average of 18.59% amid strong sell pressure, as investors re‑allocated from debt amid soaring consumer‑price inflation near 16% and a benchmark interest rate of 26.5%.

Separately, a report by Omni valued Nigeria’s fast‑moving consumer‑goods sector at $25 billion, ranking it the second‑largest in Africa. The study highlighted fragmented supply chains and limited financing as constraints, and pointed to digital payments, embedded finance and AI as key levers for future growth.

Overall, the combined outlook shows a mixed picture: potential equity upside from marquee IPOs, but heightened inflation, slower growth, tighter credit conditions and election‑driven market volatility pose significant challenges for investors.