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Nigeria’s central bank is formalizing its shift toward an inflation-targeting framework that will target 16.5% inflation in 2026, with a tolerance band of plus or minus two percentage points, compared with 18.5% this year.
The Central Bank of Nigeria (CBN) said in its 2026 macroeconomic outlook released Tuesday. The bank expects price gains to average about 21% this year.
The bank forecasts that the naira will average N1,400 per dollar in 2026, from about N1,451, supported by a more efficient foreign-exchange market, stronger capital inflows and a current-account surplus.
“The initial phase features transitional inflation targets designed to enhance policy credibility,” the central bank said in the report, adding that the framework will serve as a transparent medium-term anchor while institutional capacity is strengthened.
Foreign-exchange reserves are estimated to rise about 13% to $51 billion next year while crude oil production — minus condensates — is assumed at about 1.5 million barrels per day.
Higher-than-expected increases in pre-election spending ahead of polls in 2027, and extra-budgetary outlays could pose a risk to the inflation outlook for 2026, according to the document.
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