The Federal Government is setting a markedly higher growth target than external forecasters, aiming for 7 per cent expansion on the back of a more stable naira, easing food prices and lower operating costs for businesses. The goal sits well above the International Monetary Fund’s projections of 4.3 per cent for 2026 and 4.4 per cent for 2027, underscoring a more optimistic reading of the economy’s near-term potential.
Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele has pointed to recent developments in the foreign-exchange market as one of the main supports for this improved outlook. In his assessment, the naira’s relative steadiness has already begun to relieve some of the pressure on consumer prices, particularly the imported components that feed into broader inflation.
Three Pillars of the Strategy
The government’s case rests on three interconnected conditions. First is sustained stability in the exchange rate, which reduces uncertainty for importers, manufacturers and investors and helps contain the pass-through of currency swings into domestic prices. Second is a further decline in food inflation, which remains one of the heaviest burdens on household budgets and a key driver of overall price pressures. Third is a general reduction in the cost of doing business, which the authorities hope will encourage firms to expand output and hire.
Yet Oyedele has also been clear about a major remaining obstacle: the high cost of borrowing. Elevated interest rates continue to limit private-sector investment and expansion, even as some individual companies report stronger activity. He highlighted the contrast between the growth visible in certain businesses and the more modest performance of the economy as a whole, suggesting that opportunity exists but is unevenly distributed.
“Everywhere you look, there’s an opportunity. But you need to look for the opportunity,” he said.
What It Means for Businesses and Households
For companies, the 7 per cent target will be credible only if currency stability holds and financing costs begin to ease. Manufacturers and traders that depend on imported inputs stand to benefit most from a calmer naira, while lower food prices would support consumer demand. Households, meanwhile, would feel the difference mainly through more affordable staples and, eventually, greater job creation if private investment recovers.
The gap between the government’s ambition and the IMF’s more cautious forecasts leaves little room for slippage. If the naira remains relatively steady, food inflation continues to moderate and borrowing costs gradually decline, the conditions for faster growth could strengthen. If any of those supports weakens, the 7 per cent figure risks remaining an aspiration rather than an outcome.
