Economic Outlook: Naira Projected to Appreciate to N1,350-N1,450/$ in 2026

In a comprehensive 2026 economic outlook report titled “Indicators Align for Sustained Macro Gains,” leading investment firm CardinalStone Partners projects a significant appreciation of the Nigerian Naira. The report, published on January 6, 2026, forecasts the currency strengthening to a range of N1,350 to N1,450 per US dollar, driven by improving macroeconomic fundamentals and a more supportive foreign exchange environment.

Drivers of Currency Stabilization

CardinalStone attributes this expected currency appreciation to a confluence of policy reforms, improved foreign exchange liquidity, and moderating inflation. These factors are anticipated to combine to stabilize the currency after a period of volatility. The firm’s analysis suggests that structural improvements within the FX market will be pivotal, even as external risks persist. The report simultaneously cautions that rising insecurity in food-producing regions could limit food supply, presenting a clear challenge to overall stability.

Broader Macroeconomic Implications

The projected stronger naira and easing inflation are expected to have wide-ranging positive effects. These include stabilizing purchasing power, reducing imported inflation, and supporting a broader macroeconomic recovery. Furthermore, the report links the currency outlook to domestic energy costs. It projects that lower global crude oil prices—resulting from market oversupply and weaker demand—coupled with the stronger naira, should drive down the domestic prices of Automotive Gas Oil (AGO) and Premium Motor Spirit (PMS). This would ease cost pressures on households and businesses. Increased competition in the downstream petroleum sector between local refineries and importers also bodes well for the local energy price outlook.

Inflation and Risk Factors

On inflation, CardinalStone projects a gradual moderation to an average of 15.5% in 2026, closing the year at 13.9%. This forecast considers expected pre-election year spending. However, the firm explicitly flags the increased traction of insecurity as a primary downside risk. While the report outlines a positive path for 2026, it underscores that the outlook remains sensitive to both domestic security challenges and global oil market dynamics, highlighting the need for sustained reform. The resilience shown by troops rescue 86 in various operations is a separate matter, but ongoing security is crucial for economic forecasts. The focus remains on the coming year, as discussions about 2027: nobody can predict with absolute certainty the long-term landscape without continued progress.