PwC has projected that Nigeria’s economy could expand by about 4.2 per cent in the second half of 2026, supported by stronger crude oil production and a gradual recovery in non oil commercial activity.
The projection is contained in the firm’s report on converting macroeconomic stabilization into more inclusive growth.
PwC said several headline indicators had improved after a prolonged period of volatility, but warned that high food and energy costs continued to threaten the wider benefits of economic reforms.
Nigeria’s gross domestic product grew by 3.89 per cent in the first quarter of 2026, compared with 3.13 per cent in the same period of the previous year.
PwC linked the improvement to structural reforms, better foreign exchange liquidity and the recovery in crude oil production.
Output reached about 1.56 million barrels per day in June.
The firm said higher crude prices could improve oil revenue and foreign exchange inflows if production gains were sustained and fiscal leakages reduced.
However, it warned that higher prices for refined petroleum products, freight, fertiliser and transport could add to imported inflation and weaken household purchasing power.
PwC noted that headline inflation had moderated, but said the cost of food, transportation and household energy remained a major problem for consumers.
The report warned that high living costs were squeezing household spending and business margins and could undermine public confidence in reform.
PwC recommended stronger agricultural productivity, better storage, improved logistics and selective temporary imports where needed to ease shortages.
The firm said economic reform would only produce broad benefits if it generated jobs, reduced poverty and attracted patient investment.
Capital importation reached about $10.37 billion in the first quarter of 2026.
However, Foreign Portfolio Investment accounted for 95.1 per cent of those inflows.
Foreign Direct Investment represented only 1.3 per cent, or about $135.1 million.
PwC warned that portfolio investment could support reserves and currency stability but remained more volatile and less useful for building factories, creating employment and expanding productive capacity.
The firm urged government to create a more predictable and secure environment for long term investment in manufacturing, large scale agriculture, power and other productive sectors.
Foreign exchange reserves stood at about $51.46 billion in June 2026, representing strong year on year growth.
PwC also noted the narrowing gap between official and parallel exchange rates, which it said had reduced arbitrage and helped businesses plan foreign exchange transactions more effectively.
The report nevertheless warned that the Monetary Policy Rate of 26.50 per cent continued to make credit expensive for businesses, particularly small and medium sized enterprises.
Energy costs remained another major concern.
PwC cited significant year on year increases in diesel, kerosene, petrol and cooking gas prices.
The firm said expanding domestic refining, reducing distribution bottlenecks, increasing domestic gas supply and maintaining exchange rate stability could help reduce some of those pressures.
It also called for stronger pipeline security, reduced crude theft and continued expansion of domestic refining capacity.
PwC concluded that Nigeria’s next challenge was to translate improving macroeconomic indicators into stronger household purchasing power, productive investment and sustainable employment.
