Happy New Year to you, dear readers. Grateful to our Maker for His faithfulness and preservation. May this year bring about the fulfillment of your dreams, and may it be your best ever.
It is that season when many Christian leaders usually release their prophecies for the year. Mine is not a prophecy but a perception and an analysis of what the new year may look like in the light of what we know.
This is the year preceding the election year. We should expect increased spending by governments to please the electorate. Much of the spending will be on populist measures and not necessarily what will make sense. The Independent National Electoral Commission (INEC) will blow the whistle on the next election. So, expect to see a lot of political activities resulting in big spending this year. Our so-called democracy thinks in four years cycle.
In this wise, expect some mild tussles between the fiscal arm of government (ministries of finance and budget planning) on the need to spend money and the monetary arm (the central bank principally) on how to control spending and curb inflation. In 2025, the fiscal and monetary policies were very aligned which explains the results we saw in the last quarter of the year.
2026 will be coloured by the new tax act which is already enmeshed in controversy. Ordinarily, the government suppose to suspend the tax law implementation until 1 April and use the first quarter to sort out the mess that trailed it, but this is Nigeria so the President has insisted that the law starts today. This gives credence to the notion that the gazetted version, said not to be the version approved by the parliament, received executive approval. Technically, there is no law to be implemented, but President Bola Ahmed Tinubu government will have its way. Be that as it may, the new law will place more burden upon the rich, alleviate the tax burden of the poor and put more money in the pockets of government officials and their collaborators. Full stop.
Despite the increase in capital gains tax from 10 per cent to 30 per cent effective today, which caused a tornado in the capital market last November, that market will play a very significant role in the economy of the country. Currently, the market capitalisation of the Nigerian Stock Exchange is about a quarter of the gross domestic product of the country. Should Dangote Refinery and Flutterwave, a behemoth in the fintech space, get list on the stock exchange, the capital market will be more than half Nigeria’s GDP. Currently, 21 companies are worth at least a trillion Naira each in market capitalisation. That number will increase in 2026 to more than 25 without even a new entry. More discerning people will become wealthier on account of their investments in the stock market. Did you do the math on what Femi Otedola made out of Geregu Power?
The real estate market in at least Lagos and Abuja will see increased demand in the high end segment of the market as more Nigerians become wealthier. I saw an ad for a four bedroom penthouse at Oniru, Victoria Island extension going for over a billion Naira. As MISA Limited, a property developer said, lifestyle-driven housing will outperform traditional demand. I can add that location will continue to shape the cost of housing. The rebasing of the economy showed that the real estate sector has been playing key role in the economy more than previously thought as it took the worth of that sector from N10.5 trillion in 2023 to N30.7 trillion in 2024; and N41 trillion in 2025, contributing 13.36 per cent to the GDP.
As the power sector continues to falter, demand for green energy and mini grid will increase. In today’s world, there is not much one can do without power. But since Nigeria has refused to recognise it, many individuals and organisations will leave the national grid alone and seek solace in solar and other renewable and alternative energies. Even those of us deceived into believing that there would be power for 20 hours a day in the so-called Band A, we have realised that we were sold the short end of the stick. From the DISCOs, it is just story telling. Many discerning Nigerians will not wait forever for public power to be available. But I can offer a guess to government: let each of the companies handle end to end the power value chain: Generating, Transmitting, Distributing and Marketing of electric power to Nigerians. The government needs to end the generating set-cum-diesel economy we have so fallen in love with for decades.
Same goes for electric vehicles (EVs). EVs have become a common feature on Lagos roads. I guess it is the same in Abuja. More EVs are expected to become available in other parts of the country as we go into 2026. The main accelerators for the adoption of EVs in Nigeria are the high cost of petrol and the cost of vehicle maintenance. CNG powered vehicles will not grow as fast as EVs except perhaps for heavy duty vehicles. Even the federal government that was head over heels has stylishly soft-pedaled CNG vehicles. EV charging stations will become part of our features starting from this year. The application of Artificial Intelligence in everyday life will follow same pattern as the EVs.
Banking consolidation will be good and hardly any bank will fall foul of consolidation benchmark. And with the consolidation comes increased lending to real businesses for expansion. Nevertheless, traditional banks will have to be more agile and adaptive given the disruptions that the fintech industry has brought into banking. At the minimum, they have expanded financial inclusion and chirped away at potential customers of banks. OPay and MoniePoint say they are micro finance banks but they have leveraged technology to handle volumes of transactions that small sized traditional banks can only envy. More of this constructive disruption should be expected.
The capital debt market will grow exponentially in 2026. Despite the challenges of the year 2025, many corporates accessed the capital debt market via Commercial Papers to borrow money to run their businesses. On the average, it is between 5 per cent and 10 per cent cheaper for corporates to borrow money from the capital debt market than from banks. Even a Dangote Cement with its deep pockets always prefers commercial papers to banks to meet its short term needs. Some privately owned companies rely on CPs to run their businesses. The Securities and Exchange Commission has mentioned that between April and October of last year, corporates raised over N750 billion in Commercial Papers. Assuming a full year N1.5 trillion debt, this is not small money in the economy. More of it to be expected in the new year. This amount does not include other sources of money that corporates accessed such as special placements, private placements, rights issues, public offers and the like.
Given the threat from the United States President, government will pay more than lip service in dealing with the security situation in the country. Even though insecurity will persist in 2026, government response will be more frontal than we had witnessed in the past. The withdrawal of mobile policemen from ‘very important persons’, even though partially observed, the designation of all forms of insurgency and kidnapping as terrorism are right steps. What needs to happen is to channel the huge amount of money voted for defense into it. It is hoped that electioneering campaigns will not heighten the security situation.
Our health care and education systems will still be in shambles in 2026. There is nothing in the horizon to address the decades of neglect, even destructions, that these critical sectors have suffered from the hands of successive governments at all levels of governance. The situation is more pathetic in the northern states where a governor, for nothing short of populism, would rather spend billions of taxpayers money to send cronies and well off people on pilgrimage than spend millions on education and health care for the poor.
Let me, however, acknowledge the agreement signed between the federal government and the academic staff union of universities (ASUU) which comes into effect today. A 40 percent salary increase for lecturers and a salary for live for professors is a good starting point, but certainly not enough given the current poor salary structure of university teachers. As REFLECTIONS! has always mentioned, civil servants in Nigeria are very poorly remunerated.
As Bill Clinton, a former United States’ President, said in his electioneering campaign slogan, it is the economy, stupid! The economy grew 3.98 per cent in the third quarter of the outgone year, and 4.23 per cent in the second quarter. At best, it will be slightly higher than that range when the numbers for the fourth quarter are released. Inflation has been on the decline for seven consecutive months and well below 15%.
Moody’s, Fitch and Standard and Poor’s, core western credit rating agencies, have since upgraded their ratings on the Nigerian economy. The capital market did a 51 per cent growth in 2025 and delivered just under N100 trillion capitalisation. That is phenomenal by any measure.
To the poor man on the street, these are just numbers that bring no food to the table. Well over 100 million Nigerians are still poor, and a half of them are multidimensionally poor. If in a given year we do not keep the base (by that I mean more people don’t slip into poverty) and take at least 5 million people out of poverty yearly, no matter how nice the statistical data is, we didn’t do well. This is the real challenge that President Tinubu’s government will face in 2026.
Agriculture is still the easiest route out of the quagmire, especially in the north where there is so much arable land and higher poverty rates. Which explains why insecurity, which has denied many farmers access to farmland, needs to be addressed fast.
I don’t know about you, but I am very optimistic about 2026 particularly from the economic and security angles. It will be foolhardy for me to be equally optimistic about political space which this government has worked to narrow by wanting to kill opposition.
All things being equal, expect a better future. 2024 was perhaps Nigeria’s worst year in decades. Things got slightly better in the second half of last year. With cautious optimism, a brighter 2026 beckons.
Happy New Year again!
Esiere is a former journalist!
