The Nigerian business community has a habit of analysing the domestic economy in relative isolation. Inflation is tracked, the exchange rate is watched, CBN decisions are debated. What receives less rigorous attention is how much the trajectory of those very indicators is being shaped by events entirely outside Nigeria’s control. The rest of 2026 cannot be understood through a domestic lens alone. What is happening in the Middle East, in Washington, and in global capital markets is already inside Nigeria’s cost structures, its currency, and its government revenues. This piece addresses both dimensions together, because that is the only way they make sense.
WHERE THE ECONOMY ACTUALLY STANDS
Nigeria’s real GDP grew by 3.89% in Q1 2026, ahead of the 3.13% recorded in Q1 2025, driven by agriculture, services, construction, and manufacturing. These are genuine improvements. Telecoms and information services grew 10.98% in real terms, financial and insurance activities by 8.54%, construction by 6.38%, and manufacturing by 3.29%, its strongest quarterly performance in four years. Agriculture rebounded sharply to 3.15% from just 0.07% a year earlier.
The structural weakness running beneath those numbers is worth naming directly. Oil contributed less than 4% to real GDP in Q1 2026, yet it remains central to dollar earnings and fiscal revenue. Average crude production stood at 1.55 million barrels per day, below both the Q1 2025 figure of 1.62 million and the 2.12 million barrels per day budget benchmark. Debt servicing is projected to consume approximately 45% of federal revenue this year. The World Bank revised its 2026 growth forecast downward to 4.1%, citing rising global uncertainties and oil market volatility. Growth is real. The base it sits on is not yet secure.
THE IRAN WAR AND OIL PRICES: A PICTURE THAT HAS CHANGED
The Iran war was the defining global event for Nigerian business planning in the first half of 2026. The closure of the Strait of Hormuz in early March triggered what the IEA described as the largest supply disruption in the history of the global oil market. Brent crude surged past $126 per barrel at its peak. The effects on Nigeria were real and immediate: fuel prices rose sharply, inflation reversed an eleven-month disinflationary trend, and transport costs surged.
As this piece goes to publication, the picture has changed materially. The United States and Iran are scheduled to sign an interim peace deal in Switzerland on Friday June 20, 2026. Brent crude has already fallen to approximately $78 to $79 per barrel, its lowest level since early March, down nearly 20% from its peak. Dangote Refinery cut aviation fuel prices on June 6 and is expected to follow with petrol price reductions as feedstock costs normalise. The worst of the oil price shock is passing.
But two things remain true. First, the inflationary damage from the fuel price surge has already passed through the system. Nigeria’s headline inflation rose for a third consecutive month in May 2026 to 15.93%, up from 15.69% in April and 15.06% in February. Core inflation, which strips out volatile food and energy prices, climbed to 16.82% in May, accelerating sharply on a monthly basis. That is not a price shock. That is spreading price pressure. Second, the oil price paradox that has defined Nigeria for decades is now materially different. As of May 2026, the Dangote Refinery is processing roughly 648,500 barrels per day at approximately 99.4% capacity utilisation. Nigeria is now a net petrol exporter, supplying around 80% of domestic demand and exporting to markets across West Africa. The refinery cannot eliminate Nigeria’s exposure to global crude price movements, but it has fundamentally changed the transmission mechanism.
The worst of the oil shock is passing. The inflationary damage it caused is already in the system. These are different problems, and businesses need to plan for both.
FX AND LIQUIDITY: STABILITY AT A RECORD HIGH, BUT NOT UNCONDITIONAL
Nigeria’s external reserves reached $50.81 billion as of June 15, 2026, a 17-year high and within touching distance of the CBN’s full-year target of $51.04 billion. The increase of $12.99 billion over the past year represents a 34% rise. Nigeria recorded $10.37 billion in capital importation in Q1 2026 alone, up 83.8% year-on-year. The naira has been trading in a relatively narrow range, closing at approximately N1,357 to N1,364 per dollar at the official NFEM window in mid-June.
Two important developments accompanied this stability. First, the CBN launched its fourth edition Foreign Exchange Manual on June 1, deepening FX transparency and improving market access for businesses and individuals. The naira appreciated N5.74 on the day of launch. Second, the IMF has now entered the conversation, recommending that the CBN slow its reserve accumulation and allow greater two-way movement in the naira, which the Fund assesses as substantially undervalued. That is not alarming news. It is a signal that the CBN’s credibility has improved to the point where international institutions are comfortable advocating for greater flexibility.
What has not changed is the structural character of the inflows. The CBN cut the Monetary Policy Rate by 50 basis points to 26.5% in February 2026, its first reduction in years. At the May 20 MPC meeting, the committee held rates steady, citing three consecutive months of rising inflation. The 45% Cash Reserve Ratio for commercial banks remains unchanged, continuing to constrain credit availability. And the portfolio investment that has done much of the heavy lifting in reserve accumulation is, by nature, mobile. With oil prices now falling as the Iran deal approaches, the partial reversal of the reserve tailwind from elevated crude is worth monitoring.
MBR’s position: run the second half of 2026 under two FX scenarios. Naira at N1,350 to N1,450, and naira weakening beyond N1,600. If the business cannot absorb the second, that is a structural problem, not a forecasting one.
INFLATION: THE TREND THAT REVERSED IS NOT YET REVERSED
Nigeria’s headline inflation fell from above 30% in early 2024 to 15.06% in February 2026. That represented eleven consecutive months of decline and genuine policy progress. Then the Iran war hit.
The May 2026 NBS report published June 15 shows headline inflation at 15.93%, the highest reading since last November. That is a third consecutive monthly increase. Food inflation reached 16.96% year-on-year. Core inflation hit 16.82%, with monthly core inflation accelerating sharply to 1.94% from 1.03% in April. The divergence between headline and core is the most important signal in the data. Headline inflation can be driven by temporary shocks, including fuel prices, which are now easing. Core inflation reflects whether those pressures are spreading into the broader economy. The May reading suggests they are.
For businesses, the operational implication is direct. The cost repricing of the past two years, energy, logistics, imported inputs, and skilled labour, has not reversed. Margin buffers have not been rebuilt. Most businesses have not fully passed through cumulative cost increases because competitive dynamics made it difficult. A forensic review of cost structure, one that distinguishes permanently repriced inputs from cyclically elevated ones, is among the most valuable exercises a Nigerian business can undertake before the end of Q3.
US TRADE POLICY: MORE COMPLEX THAN IT APPEARS
The US trade environment affecting Nigeria involves multiple overlapping instruments, and understanding which ones actually matter requires working through the detail.
AGOA, the African Growth and Opportunity Act, was extended by Congress to December 31, 2026, with President Trump signing the renewal on February 3. That is the good news. The less encouraging reality is that AGOA’s benefits are significantly diluted by other tariff measures. A 10% universal tariff applies on top of AGOA preferences for most goods. Steel and aluminium face 50% tariffs effective since June 2025. For Nigeria specifically, crude oil, the country’s primary US export, is carved out of the most damaging measures, which limits the direct fiscal impact.
The unresolved risk is the Section 301 forced-labour investigation. As of June 2, 2026, the USTR published findings proposing an additional 12.5% duty on goods from Nigeria and other African nations, with a public hearing window. The investigation has not concluded, but the direction is clear. Nigeria’s non-oil export businesses with US market exposure need to understand their position under the current and proposed tariff structure and engage with the consultation process.
The deeper risk, as stated in our previous version of this piece, is the capital flow dimension. US policy uncertainty suppresses foreign direct investment and tightens international financing conditions. AGOA itself expires permanently at end of 2026 with no long-term renewal yet agreed. Given that China simultaneously began offering nearly universal duty-free access to African countries effective May 1, 2026, Nigeria’s strategic trade positioning deserves board-level attention that goes well beyond the headline tariff numbers.
THE 2026 TAX REFORM: SIX MONTHS IN, COMPLIANCE GAPS REMAIN SIGNIFICANT
President Tinubu signed four tax reform bills into law in June 2025, with full implementation from January 1, 2026. The reforms repealed and replaced the Personal Income Tax Act, Companies Income Tax Act, VAT Act, Capital Gains Tax Act, Petroleum Profits Tax Act, and Stamp Duties Act. The Federal Inland Revenue Service has been renamed and reborn as the Nigeria Revenue Service.
Six months into implementation, the compliance picture is mixed. The NRS is deploying AI-driven tools to cross-reference payroll, bank transactions, and tax filings. The penalties are real: late filing attracts N100,000 for the first month, then N50,000 monthly. Under Section 60 of the Nigeria Tax Administration Act, the NRS and state internal revenue services can freeze bank accounts without a court order for established tax debts. That is not a theoretical risk. It is an operational one.
Key provisions businesses need to have acted on by now: unified TIN registration and validation for all employees and vendors; updated payroll systems reflecting the new PAYE bands; e-invoicing compliance for VAT purposes; and a review of group structures for the Capital Gains Tax changes on indirect share transfers. The exemption threshold for small companies has been set at annual turnover below N100 million, which provides significant relief for qualifying SMEs. Larger companies now face a 4% Development Levy on assessable profits, consolidating several previous levies.
For businesses operating in free trade or export processing zones, the repeal of tax holidays and fiscal incentives requires a re-evaluation of investment economics and group structures. The question every CFO should be able to answer today is not whether the reform affects your business. It does. The question is what the specific exposure is and what the remediation cost looks like.
The NRS can freeze your bank account without a court order. That changes the risk calculus from a compliance matter to an operational continuity matter. Boards should have addressed this already.
TECHNOLOGY AND DIGITISATION: THE WINDOW IS NARROWING
The National Digital Economy and E-Governance Bill is expected to become law in 2026, legalising electronic transactions, e-signatures, and electronic records, while establishing frameworks for artificial intelligence ethics and data sharing. The Fintech Regulatory Commission Bill is advancing toward a single supervisory authority across payments, lending, cryptocurrency, and digital financial services.
The new tax administration framework already mandates electronic invoicing. The NRS is using AI tools to cross-reference payroll and bank data. ICT grew 10.98% in real terms in Q1 2026. The Nigerian economy is going digital faster than many business operations are adapting. Paper-based approvals, informal payment channels, and manual record-keeping are becoming incompatible with both the regulatory direction and the competitive environment.
Digitisation in the current Nigerian context is not a transformation project. It is a compliance and risk management investment with a shortening timeline. Businesses that frame it as optional are running a risk they may not have fully priced.
SECURITY AND POLITICAL RISK: PRICE IT IN
Persistent insecurity across northern and central Nigeria continues to disrupt supply chains and agricultural logistics. The 2027 election cycle is approaching, and pre-election periods in Nigeria typically bring fiscal loosening and policy uncertainty. Global geopolitical risk, while partially easing with the anticipated Iran peace deal, remains elevated.
We are not recommending paralysis. We are recommending honesty about where single points of failure exist in your supply chain and logistics network, and whether your contingency plans are credible and tested.
WHAT BUSINESSES SHOULD BE DOING RIGHT NOW
Six priorities for the rest of 2026:
Review cost structure with current assumptions
Fuel-driven inflation pressure is easing but has not reversed. Core inflation is accelerating. Understand what that does to your margins and where pricing needs to move.
Run two FX scenarios for H2
The naira at N1,360 reflects specific conditions. Oil prices are falling. The Iran peace deal changes some of those conditions. Plan for naira stability and for meaningful depreciation.
Treat the 2026 tax reform as a board-level matter
Audit TIN compliance, validate payroll against the new PAYE bands, assess bank-freeze risk under Section 60 of the NTAA, and build your remediation budget. Six months in, this should already be done.
Understand your US trade exposure
Non-oil US export businesses should assess their position under current and proposed tariffs. AGOA expires in December 2026 with no long-term renewal agreed. The strategic trade picture is shifting faster than most businesses are tracking.
Invest in digital infrastructure now
The regulatory timeline is shorter than most businesses have planned for. E-invoicing compliance, digital records, and NRS-compatible systems are not optional.
Test credit headroom while conditions allow
The 45% CRR is not easing before the next MPC meeting. With inflation still rising, a rate cut in July is not certain. Test revolving facility availability now.
Nigeria is not in crisis. But it is in a demanding phase that requires active management and clear thinking, not passive optimism. The businesses that emerge from 2026 in stronger positions are the ones reading the global and domestic picture together, planning for scenarios they would rather not face, and making decisions accordingly. That is not pessimism. That is what good business leadership looks like.
Moore Bishop and Rooks is a professional services firm and a member of the Moore Global network. This commentary is for general guidance purposes and does not constitute legal, tax, or financial advice. For specific advisory support, contact your MBR engagement partner.