In a significant forecast for the Nigerian economy, PricewaterhouseCoopers (PwC) Nigeria has projected a period of relative stability for the national currency in the coming year. The advisory firm predicts the naira will trade within a band of N1,440 to N1,500 against the US dollar throughout 2026.
Economic Outlook 2026: Growth Amidst Stability
This currency projection is a central feature of PwC's recently released Economic Outlook 2026 report. The comprehensive document examines the key trends expected to shape Nigeria's economic landscape, covering critical areas such as Gross Domestic Product (GDP) expansion, inflation, poverty levels, and monetary policy direction.
According to the firm's analysis, the anticipated steadiness of the naira is primarily supported by the ongoing reforms initiated by the Central Bank of Nigeria (CBN) and an improvement in portfolio investments flowing into the country. These factors have collectively enhanced liquidity within the foreign exchange market. Furthermore, PwC points to easing inflation expectations and a stronger reserve position as additional pillars likely to bolster the local currency's performance in 2026.
GDP, Inflation, and Interest Rate Forecasts
Beyond currency stability, PwC's report paints a picture of broader economic improvement. The firm forecasts that Nigeria's GDP growth will accelerate to 4.49% in 2026, up from an estimated 3.89% in 2025. This growth is expected to be driven by gains in real sector productivity, sustained trade surpluses, and consistent crude oil exports.
On the inflation front, there is welcome news for households and businesses. PwC projects that the headline inflation rate will moderate to an average of 12.94% in 2026. Concurrently, the firm anticipates that the Monetary Policy Rate, currently at 27%, will begin a gradual easing cycle. This shift towards lower interest rates is expected to reflect a cautious move by policymakers to support disinflation without jeopardising the nation's hard-won macroeconomic stability.
Persistent Risks and the Poverty Challenge
Despite the optimistic projections for growth and stability, PwC sounded a clear note of caution. The report identifies foreign exchange shocks as a persistent key risk to Nigeria's economic equilibrium. A major vulnerability stems from the country's significant debt obligations, which are denominated in foreign currencies. Any sharp, unanticipated depreciation of the naira would drastically increase the domestic cost of servicing this external debt and other dollar-linked commitments.
The advisory firm warned that such currency volatility could swiftly deteriorate the nation's debt metrics and exert severe pressure on foreign reserves, even in the absence of new borrowing. Other potential threats highlighted include sudden reversals in capital flows and escalating geopolitical tensions, which could weaken the naira and amplify imported inflation.
Perhaps the most sobering part of the outlook concerns poverty. PwC projects that, despite the expected economic growth, approximately 141 million Nigerians, or 62% of the population, could be living in poverty by the end of 2026. The firm emphasised that while monetary policy easing and currency stability are positive macroeconomic developments, translating these gains into tangible improvements in everyday living standards will require a much stronger focus on creating employment opportunities and fostering real income growth for citizens.
Context and Comparative Analysis
PwC's outlook arrives as Nigeria continues to navigate complex macroeconomic conditions, characterised until recently by soaring inflation, high interest rates, and limited formal job creation, all of which have strained household welfare.
The report's findings on exchange rate stability find some resonance with projections from other analysis firms. For instance, SBM Intelligence has previously forecast that the naira will trade within a relatively narrow band of N1,470 to N1,520 per dollar throughout 2026. The Africa-focused research firm anchored its projection on expectations of improved government earnings and steady crude oil output, which are vital for foreign exchange inflows. The naira has maintained relative stability in both official and parallel markets since the introduction of the Electronic Foreign Exchange Matching System in December 2024.
In conclusion, PwC Nigeria maintains a cautiously optimistic stance for 2026. The firm stresses that continued policy consistency and the deepening of structural reforms will be absolutely critical to sustaining macroeconomic stability and supporting the country's economic growth trajectory in the year ahead and beyond.
