Nigeria’s economic recovery could come under renewed pressure from persistently high borrowing costs and inflation despite stronger crude oil production and ongoing economic reforms, the Organisation of the Petroleum Exporting Countries (OPEC) has warned.
In its July ‘Monthly Oil Market Report’, OPEC said Nigeria’s near-term economic outlook remains positive, supported by higher oil production, improving macroeconomic stability, stronger business activity and continued reform efforts. However, it cautioned that inflationary pressures and expensive credit continue to pose significant risks to sustained growth.
According to the report, Nigeria’s economy expanded by 3.9% year-on-year in the first quarter of 2026, marginally below the 4.0% recorded in the final quarter of 2025, indicating that growth has remained close to recent highs.
The organisation noted that the non-oil sector remained the principal driver of economic expansion, with agriculture, manufacturing, construction, trade, finance and insurance contributing significantly to growth. It added that improved crude oil production had strengthened government revenues, boosted foreign exchange inflows and reinforced the country’s external reserves.
OPEC also pointed to private sector data showing continued expansion in business activity. It said the ‘StanbicIBTC Bank Nigeria Purchasing Managers’ Index (PMI)’ moderated slightly to 53.4 in June, from 54.1 in May, but remained above the 50-point threshold, indicating sustained growth in economic activity.
According to the report, stronger output, increased new orders and resilient consumer demand continued to support business expansion, although manufacturing activity softened slightly during the review period. The oil producers’ group further noted that increased domestic refining capacity, particularly the improved fuel supply from the Ɗangote Refinery, is expected to strengthen energy availability and ease pressure on imports.
Despite the positive outlook, the organisation expressed concern over rising consumer prices, noting that Nigeria’s inflation rate increased to 15.9% in May from 15.7% in April as food prices continued to weaken household purchasing power.
