Nigeria’s Top Policy Risks Investors are Watching in 2026

As year 2026 is here, the economic landscape in Nigeria is shifting from a period of “painful stabilization” to one of “cautious expansion.”

However, for institutional and private investors, the year is defined by a delicate balance: the promising upside of structural reforms versus the looming shadow of pre-election politics.

Here is an analysis of the top policy risks and focus areas shaping the Nigerian investment climate in 2026.

The Macroeconomic Backdrop: A Year of The Narrow Ridge

President Bola Tinubu’s 2026 New Year address projected a more robust growth phase, with GDP expected to expand by 4.49%.

While the Central Bank of Nigeria (CBN) expects inflation to moderate toward 12.94%, investors remain wary of “implementation gaps” that could widen as the 2027 general elections draw closer.

Top 5 Policy Risks Investors Are Watching

1. Fiscal Dominance & Pre-Election “Spending Spree”

Historically, the year preceding a general election in Nigeria is marked by extra-budgetary spending.

The Risk: Agusto & Co. warned that political pressure may force the government to increase statutory transfers, potentially monetizing debt and undermining the CBN’s hard-won price stability.

The Fallout: Excessive liquidity could reignite inflation, which only recently began its descent from 2025 highs.

2. The Implementation Gap – Tax & Structural Reforms

The Nigeria Tax Act 2025 officially commenced on January 1, 2026. While it offers a “SME tax holiday” for 97% of small businesses, the risk lies in the transition.

The Risk: Parthian Partners notes that “policy fatigue” or resistance to new levies could stall revenue mobilization. Investors are watching to see if the Joint Revenue Board can successfully end the era of multiple taxation at the state level.

3. Insecurity: The “Inflationary Channel”

Insecurity remains a structural threat to both oil revenue and food prices.

Food Inflation: Heightened tensions in the “Middle Belt” (Nigeria’s food basket) keep logistics costs high and supply low.

Oil Production: While the 2026 budget is anchored on 1.71 mbpd, Agusto & Co. warns that any resurgence of unrest in the Niger Delta could threaten the fragile recovery in crude production.

4. FX Volatility & Reserve Resilience

The CBN projects foreign reserves to hit $51 billion in 2026.

The Risk: Despite the “Naira gain” seen in late 2025, stability depends on continued convergence between the official and parallel markets. Investors are monitoring the FX market reforms to ensure price discovery remains transparent and that manufacturers can access dollars without recourse to the black market.

5. Energy Costs & The Subsidy Shadow

The operationalization of the Dangote Refinery has acted as a “structural hedge,” but the 15% import duty on fuel and high energy costs remain a burden for the manufacturing sector, which expanded by a fragile 1.25% in late 2025.

The Verdict: Cautious Optimism

The consensus among analysts at Agusto & Co., Proshare, and Parthian Partners is that 2026 will be a test of Institutional Resolve.

If the CBN maintains its independence from fiscal pressures and the government bridges the implementation gap on tax reforms, Nigeria could finally transition from stabilization to sustainable growth.

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