What Nigeria’s Economic Outlook Means for Businesses Going Into 2026

What Nigeria’s economic outlook means for businesses going into 2026 is no longer a question of optimism or fear. Neither is it about using hope or intention as a strategy. It is a question of judgment, sound preparedness and taking prompt actions for the coming year.

The Lagos Business School Breakfast Session held in November 2025 made one thing clear: the global and local economy has entered a phase where predictions, unlike before, are unreliable. Shocks happen frequently at the same rate that numbers change fast. As a result, businesses that survive and grow will not be those waiting for perfect forecasts, or business predictions but those making careful, informed decisions in imperfect conditions.

For Nigerian businesses, the outlook into 2026 is mixed. Inflation is easing, but prices are still high. The naira is relatively stable, but exposed to shocks. Consumer spending remains active, yet sensitive. Financial markets have performed strongly even though some adjustments are expected. Meanwhile, entertainment, tourism, and lifestyle-driven sectors are expanding faster than the rest of the economy.

This article, even though the referenced report was originally Nigeria and Lagos focused, explains what Nigeria’s economic outlook means for businesses going into 2026, using insights from the LBS report, and breaks it down into practical implications for planning, pricing, expansion, and risk management.

The Big Picture: An Economy Driven by Judgment, Not Prediction

The report strongly emphasises that the world is operating in a highly volatile, uncertain, complex and ambiguous (VUCA) environment. Over the last two decades, global recessions, financial crises, pandemics, wars, trade restrictions, and political shocks have repeatedly overturned forecasts.

The key message from the LBS session is simple and clear: economic cycles are normal, but business shocks are becoming more frequent and harder to predict.

Nigeria is not insulated from these shocks. However, the report argues that not every shock causes structural damage. Some cause temporary disruption, while others only affect sentiment. The responsibility of business leaders, therefore, is to understand which risks matter and which ones need not to be focused on.

For businesses planning to make waves in 2026, this means planning with flexibility. It also means that long-term decisions must allow room for adjustment. Short-term decisions must prioritise cash flow, stability, and operational efficiency.

Inflation Is Moderating, But the Pressure Has Not Disappeared

One of the major highlights of the report is that inflation is gradually easing toward the end of 2025. According to projections referenced in the session, inflation is expected to average around 16.9 percent in the fourth quarter of 2025, assuming exchange rate stability, controlled liquidity, and stable food prices.

However, moderation does not mean total relief. This is because prices still remain significantly higher than they were two years ago. For businesses, this means input costs, rent, logistics, energy, and wages will continue to strain margins. Consumers may spend, but they will remain price-sensitive.

What Nigeria’s economic outlook means for businesses going into 2026 is that pricing decisions must become more deliberate. Businesses can no longer rely on frequent price increases without losing customers. At the same time, absorbing costs indefinitely is not sustainable.

Businesses that will perform better are those that:

• Control operating costs tightly
• Improve efficiency instead of expanding expenses
• Review pricing structures carefully
• Offer clear value for money rather than cheap prices

The Naira: Stability With Underlying Risks

The report indicates that the naira is expected to remain relatively stable toward the end of 2025, with official rates hovering within a narrow band. This stability is supported by tighter monetary controls, improved external reserves, and cautious policy management.

However, the report also warns that volatility can return. Possible shocks include foreign portfolio investment reversals, lower oil prices, or delays in foreign inflows. While none of these are expected to cause a sharp collapse, they can still disrupt business planning. For businesses going into 2026, this means foreign exchange exposure must be managed carefully.

Import-dependent businesses, in particular, need to:

• Plan purchases early
• Avoid excessive short-term FX exposure
• Maintain buffers for currency movements

Exporters and businesses earning foreign currency may find some relief, but currency gains should not be the foundation of business strategy.

Interest Rates Will Remain High for Longer

The report makes it clear that interest rate cuts are unlikely in the near term. The Central Bank remains cautious, prioritising inflation control and financial stability. As a result, borrowing will remain expensive.

What Nigeria’s economic outlook means for businesses going into 2026 is that debt-funded expansion will be difficult. Businesses relying heavily on loans to finance growth will face higher repayment pressure.

This environment favours:

• Businesses with strong cash flow
• Gradual expansion instead of aggressive scaling
• Internal funding and retained earnings
• Careful evaluation of new projects

It also means that businesses must be disciplined about credit, both in borrowing and in extending payment terms to customers.

Consumer Spending Will Continue to Drive Economic Activity

Despite economic pressures, the report shows that consumer activity remains strong. Transaction values continue to rise, even though POS volumes have declined due to regulatory tightening over the year.
Meanwhile, festive spending, lifestyle consumption, entertainment, tourism, and personal services are major drivers of demand. This trend is expected to continue into 2026.

What Nigeria’s economic outlook means for businesses going into 2026 is that understanding consumer behaviour matters more than macro headlines. Consumers are not spending blindly. They prioritise: experiences over possessions, convenience over loyalty, and value over brand promises

Businesses that pay attention to how people spend, when they spend, and what they cut back on will outperform those relying on mere assumptions.

Sectors Showing Real Momentum

Additionally, the report identifies several sectors with sustained momentum.
Entertainment and media stand out strongly. Nigeria is projected to be Africa’s fastest-growing entertainment and media market, driven by a youthful population, digital adoption, and local content creation.

Events, movies, music, streaming, and tourism-linked businesses benefit directly from this trend.
“Dirty December” alone is expected to generate over $71.6 million in Lagos, according to figures referenced in the report. This spending affects hospitality, transportation, food, retail, fashion, and logistics.

Oil-related activities are also improving gradually, supported by rising rig counts and modest production recovery. While oil does not immediately translate into broad prosperity, it supports government revenue and external reserves. For businesses, this signals where demand is expanding and where caution is required.

What Financial Markets Are Signalling

The Nigerian stock market recorded strong gains in 2025, with broad sectoral participation. Banking, consumer goods, oil and gas, and industrial stocks all performed well at different points.
However, the report expects a mild correction toward the end of the year. This is normal after a strong rally.

For businesses, market performance reflects investor confidence more than immediate economic comfort. Strong markets suggest optimism about reforms, earnings, and macro stability. What Nigeria’s economic outlook means for businesses going into 2026 is that confidence exists, but it is fragile. Businesses should not confuse market optimism with guaranteed growth.

Politics, Policy, and External Shocks Still Matter

The report addresses political developments both globally and locally. U.S. political outcomes may reduce pressure on Nigeria, particularly around sensitive policy issues. Domestically, political continuity appears likely in the short term. However, policy decisions, trade actions, and geopolitical events remain unpredictable.

Businesses cannot control politics, but they can prepare for policy shifts by staying informed, 
avoiding over-dependence on one market or regulation, and maintaining operational flexibility
Therefore, ignoring political risk is not a strategy. Overreacting to it is also not a strategy.

What Businesses Should Do Differently Going Into 2026

The strongest takeaway from the report is that macroeconomic judgment can be learned.
For businesses, this means:

1. Planning conservatively
2. Protecting cash flow
3. Avoiding emotional decisions
4. Building flexibility into operations
5. Focusing on demand, not speculation

Conclusion

What Nigeria’s economic outlook means for businesses going into 2026 is clear when stripped of noise and fear. Inflation is easing but still painful. The naira is stable but exposed. Interest rates remain high. Consumers are spending, but selectively. Some sectors are expanding faster than others. Markets are optimistic but cautious.

Shocks will continue, but not every shock is destructive. Businesses that succeed in 2026 will not be those chasing predictions. They will be those making steady, informed decisions, grounded in reality, guided by judgment, and responsive to change.