The Organisation of the Petroleum Exporting Countries (OPEC) has warned that persistently high borrowing costs and rising inflation could undermine Nigeria’s economic recovery despite stronger oil production and ongoing economic reforms.
In its July Monthly Oil Market Report, OPEC said Nigeria’s short-term economic outlook remains positive, supported by increased crude oil production, infrastructure investment, improving macroeconomic conditions and stronger business activity.
According to the report, Nigeria’s economy expanded by 3.9 per cent year-on-year in the first quarter of 2026, slightly below the 4.0 per cent growth recorded in the final quarter of 2025.
“Overall, Nigeria’s near-term outlook remains positive, supported by oil production, reform progress, infrastructure investment and stronger business activity, but high inflation, elevated borrowing costs and the need to preserve exchange-rate stability remain important challenges,” the report stated.
OPEC said the non-oil sector continued to drive economic growth, led by agriculture, manufacturing, construction, trade, finance and insurance.
It added that increased crude oil production had strengthened government revenues, boosted foreign exchange inflows and improved external reserves.
The organisation also noted that business activity remained resilient, with the Stanbic IBTC Purchasing Managers’ Index staying above the 50-point threshold in June despite a slight moderation.
OPEC further said increased domestic refining capacity, particularly from the Dangote Refinery, should improve fuel availability and reduce import dependence.
However, it warned that inflation, which rose to 15.9 per cent in May from 15.7 per cent in April, continues to erode household purchasing power and may keep monetary policy tight.
