PwC warns that even as Nigeria’s macroeconomic stability improves, with easing inflation and stronger business confidence, the benchmark interest rate is unlikely to fall as quickly as businesses hope.
This was discussed in Lagos at PwC’s Executive Roundtable on Nigeria’s 2026 Budget and Economic Outlook, held in partnership with BusinessDay, where senior PwC partners, economists and private sector leaders assessed the country’s recovery trajectory heading into 2026.
The PUNCH reports that the Monetary Policy Committee of the Central Bank of Nigeria only cut the MPR by 50 bps in 2025 to bring the benchmark rate to 27 per cent, a rate that manufacturers have said remains high, although multiple analysts have projected that the MPC would cut rates further this year in the face of decelerating inflation.
Olusegun Zaccheaus, PwC’s Chief Economist, emphasised that while lower inflation allows for monetary easing, businesses should not anticipate rapid or aggressive cuts in interest rates.
He explained, “When you look at the monetary policy environment, which is essentially how we manage liquidity in the economy, what you notice in 2025 is that there were raised interest rates, just to manage inflation. But as inflation kept coming down, quite a number of central banks started adjusting the interest rate. Ghana, did you follow the news yesterday or two days ago? They had a dramatic reduction in their interest rate. We had a bit of a reduction. And I will talk about the reason why the pace of reduction may not be as expected. The naira has been stable, and we expect that stability to continue in 2026, but it’s going to be at a price, right? And that price is that the interest rate will not go down as fast as we desire.”
Zaccheaus maintained that even when the interest rate goes down, the private sector shouldn’t expect a major cut, partly due to 2026 being an election year.
He explained that structural pressures, including liquidity expansion around election cycles, require sustained caution. “Pre-election periods typically drive money supply growth, and managing that is critical so that inflation does not reaccelerate,” he added.
While the base outlook for 2026 is positive, Zaccheaus warned that external shocks could quickly derail progress. “The world is becoming more unstable in a way that feels almost normal, and that is dangerous,” he said. “Geopolitical tensions, oil market disruptions and policy shifts in major economies all pose downside risks for Nigeria.”
He cautioned that oil and foreign exchange remain key vulnerabilities: “Any shock to global oil production or prices would directly affect Nigeria’s budget assumptions, FX inflows and fiscal stability.”
In his opening remarks, the Regional Senior Partner, West Market Area, PwC Nigeria, Sam Abu, said optimism among Nigerian executives now far exceeds global levels.
He said, “Our CEO Survey shows optimism is rising: 90 per cent of Nigerian CEOs expect the economy to improve over the next 12 months, and 56 per cent are very or extremely confident in their organisation’s revenue growth, compared with 30 per cent globally. Success in 2026 will depend on how businesses convert stability and confidence into productivity and sustainable growth.”
However, he warned that confidence must be matched with action. “Nigeria has achieved improved macroeconomic stability, reflecting the impact of disciplined monetary and foreign-exchange reforms. Stability, however, is not the end goal. CEOs today are looking at the world through two lenses: a microscope for near-term threats such as geopolitical tensions and cyber threats, and a telescope for long-term opportunities in strategic reinvention, technology, data, and AI,” he said.
The publisher of BusinessDay, Frank Aigbogun, challenged conventional narratives around public finance, arguing that Nigeria’s core fiscal problem is inadequate revenue rather than just wastage.
“The evidence suggests that Nigeria has a top-line problem; we can only afford about 30 per cent of what we need to develop as a nation,” Aigbogun said. “That gap exists even before you factor in leakages or inefficiencies.”
He stressed the link between taxation and accountability: “People should pray to pay tax, because it is only when citizens pay tax that they truly demand excellence and accountability from government.”
Speaking on the 2026 budget, PwC Partner and Tax Reporting & Strategy Lead, Kenneth Erikume, warned that delays in capital expenditure are undermining Nigeria’s growth ambitions.
“You cannot build a sustainable economy where recurrent expenditure consistently outperforms capital spending,” Erikume said. “The slow release of capital funds in 2025 effectively pushed parts of the 2024 budget forward and created real economic pressure.”
He added that ambition must be matched with timely investment. “Delayed capital execution puts a reset on Nigeria’s aspiration to build a $1tn economy,” he said, noting that infrastructure gaps cannot be closed without predictable funding.
The panel discussion, moderated by Partner and Africa Family Business Leader Esiri Agbeyi, included Managing Director and CEO, Renaissance Africa Energy Company, Tony Attah; Interim Managing Director, Cadbury Nigeria Plc, Folake Ogundipe; Managing Partner and Co-founder, Verod Capital, Dan Verheijen; Managing Director, West Africa, Equinix, Wole Abu; and Regional Senior Partner, West Market Area, PwC Nigeria, Sam Abu.
