Nigeria has made significant strides in its economic reform efforts since 2023, including the removal of the petrol subsidy, unification of the exchange rate, and modernization of the tax framework. These reforms have led to a restoration of macroeconomic balance, with real GDP growth reaching 4.43% in Q2 2026 and 4.2% in H1, up from 2.74% in 2023.
Headline inflation has also decreased, falling to 14.63% in September 2026 from 20.98% a year earlier. Food inflation stands at 19.59%, which is higher than the overall inflation rate. The country’s gross external reserves have reached $55.1 billion as of October 9, 2026, including about $46 billion in net reserves, an 18-year high.
Investing in Infrastructure
The Nigerian government is shifting its focus towards productive capital investment, with the objective of directing new borrowing towards investments in roads, ports, rail, and power that will generate growth, revenue, and jobs for decades. Every naira and every dollar raised will go towards assets that create value, which will repay the debt.
The strategy aims to help Nigeria hit its $1 trillion economy target by 2030 by prioritizing infrastructure development over consumer spending. Key government initiatives—such as the Lagos-Calabar Coastal Highway, power sector upgrades, and port expansions—are designed to link economic zones, boost agricultural and industrial output, and generate hundreds of thousands of jobs, both directly and indirectly.
Progress on these initiatives is already evident, with the Lagos-Calabar highway now over 80% finished as of August 2026. States across the country have also shifted spending priorities, increasing capital expenditure from 46% of budgets in 2023 to 61% in 2025.
The government’s approach to borrowing is changing, with a focus on financing long-term assets with long-term debt. This shift is supported by a stronger fiscal position, with tax-to-GDP rising to 12.5% from 7%, and a trade surplus of ₦20.1 trillion recorded in H1 2026, almost double the ₦10.2 trillion recorded in H1 2025.
Value for Money
The government selects and funds these projects based on their economic impact, focusing on linking producers to markets, ports to inland regions, and Nigeria to neighboring countries. The Lagos-Calabar Coastal Highway alone is projected to cut transportation costs by 15–20% along its route and could contribute up to 2% to Nigeria’s GDP through new industrial zones, trade, and tourism.
These projects are also expected to generate significant employment opportunities, with the Coastal Highway expected to create around 100,000 direct jobs in construction and engineering, and more than 150,000 indirect jobs in logistics, materials, and services. The government’s focus on value for money and impact on growth is expected to drive economic transformation and improve living standards for Nigerians.
International investors have taken notice of Nigeria’s reforms, with all three major credit rating agencies taking positive rating actions. The country’s successful Eurobond issuance has also demonstrated renewed investor appetite for Nigerian sovereign risk. The government must now convert this confidence into capital expenditure, completed infrastructure, and lasting economic value.
The Federal Executive Council has identified five priorities for the next stage of Nigeria’s economic transformation, including food affordability and energy price stability, budget harmonization and fiscal discipline, high-impact project completion, and investment in critical infrastructure.
Nigeria’s cost of borrowing is decreasing, with the country risk premium drastically reduced. The government is extending the maturity profile of its debt, shifting from short-term borrowing to long- and very long-term maturities at lower cost. This change in the structure of Nigeria’s debt is expected to support the country’s long-term development goals.
As of October 9, 2026, Fitch rates Nigeria B with a Positive outlook, while Moody’s rates it B3 with a Positive outlook. S&P upgraded Nigeria to B on May 15, 2026, with a Stable outlook. These positive rating actions reinforce the convergence of positive signals on Nigeria from the international financial community.
Nigeria’s removal from the FATF Grey List in October 2025 and the EU’s watchlist in January 2026 has strengthened its financial transparency and compliance. These moves have opened doors to global capital, attracted more investors, and could lead to better financing terms and extended repayment periods.
On September 22, 2026, the central bank reduced the Monetary Policy Rate by 350 basis points, from 26.5% to 23%. While loan rates still exceed 30%, the push for long-term, cost-effective funding for productive investments remains critical. Foreign investors are now willing to back Nigeria for decades, signaling strong confidence in its economic direction.
