CBN Unveils 2026 Outlook, OPEC+ Maintains Output, PMI Ends Year at 53.5 

Oil markets opened the year with an important signal. OPEC+ decided to pause planned supply increases through the first quarter of 2026, holding production steady to assess market conditions following political developments in Venezuela. 🛢️. On paper, the arrest of a sitting president sounds like the kind of event that should jolt prices. In reality, it barely moved the needle. Brent crude stayed in the low $60s, and that calm reaction says a lot about where the market is focused. With U.S. production near record highs, OPEC+ output still elevated, and inventories rebuilding, supply remains ample 📦

Global supply remains comfortable 📦. U.S. production is near record highs above 13 million barrels per day, OPEC+ output is elevated, and inventories have been rebuilding. Venezuela’s current production, estimated at 700,000 to 800,000 barrels per day, is a fraction of its historical capacity and too small to disrupt global balances in the near term.

What investors are watching instead is the medium-term path. Venezuela holds the world’s largest proven crude reserves, but years of sanctions, underinvestment, and institutional decay mean any meaningful recovery would take years and billions of dollars 🔧

That backdrop explains OPEC+’s caution. Freezing supply through Q1 isn’t about lifting prices. It’s about avoiding further slippage in a market that already has more oil than it needs 📉.

For Nigeria, this matters more than the headline price. Oil still accounts for roughly 75–80% of export earnings and over 40% of government revenue 💸, and volumes remain fragile. Even with a 1.5 million barrels per day OPEC quota, Nigeria continues to struggle to consistently hit its allocation 🎯. Theft, vandalism, and aging infrastructure mean underproduction is still common. In a market with high price volatility, volumes carry a heavier cost.

The signal is straightforward. OPEC is playing defense, Venezuela remains a slow-burn supply story, and with oil still anchoring revenues, even small market shifts carry outsized consequences for Nigeria 📊🛢️.

The Central Bank of Nigeria has laid its macro cards on the table. In its 2026 Macroeconomic Outlook, the Bank projects economic growth of 4.49%, with average inflation easing to 12.94%, following two very turbulent years 📈. The baseline assumes that ongoing reforms, improved FX stability, and modest gains in oil-sector performance will be enough to support growth while keeping price pressures under control.

Growth is expected to come from familiar drivers. Stronger performance in the non-oil economy and improved external buffers are expected to reduce exposure to short-term shocks, even if they do not eliminate risks entirely. Structural reforms are meant to keep activity steady, while a more stable exchange rate and easing inflation should gradually reduce borrowing costs 💼.
Inflation sits at the centre of the outlook 📉. After averaging an estimated 21.26% in 2025, headline inflation is projected to fall sharply to an average of 12.94% in 2026 as food and fuel prices ease and FX conditions stabilise. Recent data supports this direction. Inflation declined from a peak of 34.6% in November 2024 to 14.45% by November 2025. Part of this improvement also reflects Nigeria’s CPI rebasing 📊. The inflation reference year was updated from 2009 to 2019, aligning the consumer basket more closely with current spending patterns. Taken together, FX stability, easing food pressures, continued policy tightness, and improved measurement are shaping the current disinflation trend.

 Prices remain high, but the trend has clearly shifted. The projections are built on conservative assumptions. Oil is priced at $55 per barrel, production at 1.50 million barrels per day, and the exchange rate near ₦1,400 to the dollar 🛢️💱. On the fiscal side, policy remains expansionary, with a projected ₦12.14 trillion deficit, equivalent to 3.01% of GDP, largely financed through domestic borrowing 💸. Growth, in this framework, is expected to coexist with fiscal pressure rather than remove it.

Externally, conditions are expected to improve, though not without trade-offs 💵. FX reserves are projected to rise to $51.04 billion, supported by stronger exports and remittances. Export receipts are expected to increase to $58.26 billion from $54.59 billion in 2025. At the same time, imports are forecast to climb to $43.27 billion, while services and income payments to foreign investors keep parts of the balance of payments in deficit 📊.

CBN Governor Olayemi Cardoso described the period as a shift from crisis management to recovery. He pointed to 4.23% GDP growth in Q2 2025, the strongest pace in four years, alongside sustained disinflation as signs that policy discipline is beginning to deliver results 📉.

 The CBN’s outlook, however, is more optimistic on inflation than the 2026–2028 MTEF assumption of 16.5%  📋. This gap reflects differing risk views between monetary and fiscal authorities, underscoring the importance of coordination.

Alongside the outlook, the Bank reaffirmed its priorities for 2026, including banking system stability, tighter fintech regulation, disciplined inflation control, and payments infrastructure modernisation 🏦📱. Innovation remains welcome, but within a framework anchored on governance and supervision.

In short, the outlook points in the right direction 📊. Growth depends on execution, inflation depends on discipline, and stability depends on staying cautious even as conditions improve.

Put simply, the CBN’s outlook points in a positive direction, but under clearly defined conditions. Calm optimism — with the foot still close to the brake.

Nigeria’s broad money supply(M3) hit a record ₦122.95 trillion in November, rising ₦3.9 trillion month-on-month and up 12.8% year-on-year, according to the latest data released by the CBN 💰. At first glance, that looks odd. Higher interest rates are meant to drain liquidity, not expand it.

The key is where the money comes from.  Liquidity growth has been driven largely by FX inflows and balance sheet effects, not policy looseness. As foreign currency enters the system and is converted, naira liquidity expands 📈. FX stability doesn’t just steady markets; it mechanically increases money supply. 

Domestic credit also plays a role. Ongoing government borrowing continues to grow balance sheets, and not all of that liquidity is fully sterilised 🧮. Add year-end seasonal activity, higher transactions, and inventory build-ups, and the system stays liquid even with tight rates.

Why this matters is the trade-off it creates. Inflation has eased year-on-year, but persistent liquidity growth can slow disinflation if it continues to outpace real output 📊. That keeps the CBN boxed in. Too much tightening raises borrowing costs further. Too little risks renewed price and FX pressure.

For the naira, the source of liquidity is decisive 💱. FX-driven inflows support stability. Credit-driven expansion tests it.

The takeaway is simple. Monetary control isn’t just about interest rates, alone. It’s about what’s adding money to the system, and how fast.

Nigeria’s private sector closed 2025 on a steady and encouraging note, with the Purchasing Managers’ Index (PMI) rising to 53.5 in December, according to Stanbic IBTC Bank in partnership with S&P Global 📊📈. The PMI is a monthly pulse check of business conditions, and when it stays above 50 it tells you that companies are expanding rather than contracting. At 53.5, Nigerian businesses have now remained in growth territory for 13 consecutive months, which signals resilience rather than stagnation 💼✨.

The expansion is being powered mainly by stronger customer demand 🛍️📦. More people are buying, new orders are being placed, and firms are increasing output across all major sectors, with agriculture leading the charge 🌾🚜. Companies are also restocking and increasing purchasing activity, which usually reflects confidence that demand will persist rather than fade quickly 💰📊.

That said, the growth is careful rather than aggressive. Employment rose only marginally, marking the slowest pace of hiring since mid 2025, as firms continue to grapple with material shortages and persistent power supply issues ⚡🔌. Output is rising, but many businesses are choosing to stretch existing capacity instead of committing to large hiring decisions 🧠🏭.

Price pressures edged up slightly during the festive period 🎄💸, with higher input and staff costs, but inflationary pressures remained among the weakest seen in several years 📉🙂. In practical terms, prices are still high, but they are no longer accelerating as sharply month to month, which offers some relief even if conditions remain tight 🧾📉.

The takeaway is straightforward. The economy did not lose momentum at the end of 2025. Business activity is expanding, demand is improving, and confidence is gradually stabilising 📈🤝, even as infrastructure gaps and cost pressures remind everyone that this is progress without comfort and growth that is still moving carefully into 2026 🚦🙂.

Nigeria’s stock market crossed ₦100 trillion in total value on January 5, 2026, closing at ₦101.5 trillion, as share prices rose across several big and mid-sized companies 📈💰. The All Share Index gained 1.74% in one session, showing that investors came back into the market strongly at the start of the year.

What this really tells us is that money is flowing back into equities. Investors were buying banking, consumer goods, and energy stocks, with trading activity picking up noticeably after the holiday break 🏦🛢️🛒. Large names like Zenith Bank, WAPCO, and Aradel led trading value, which suggests bigger investors were active rather than just retail traders 📊💵.

The milestone itself matters because it shows confidence has not disappeared, despite taxes, reforms, and last year’s volatility 🌍📉. Stocks are still being used as a place to preserve value in an environment where inflation is high and cash loses purchasing power quickly 💸➡️📈.

That said, this does not mean the road is clear. New capital gains tax rules and broader tax changes could still affect how investors position going forward ⚖️💡. For now, though, the signal is simple. Investors are starting the year engaged, not on the sidelines 🙂📊.

So, what now?

Watch the connections, not just the headlines 🔗.  That’s usually where the real story sits.

📌 Quote of the Week

“Clarity doesn’t arrive all at once. It shows up when you start paying attention.”

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See you next Friday 🤝