The Nigerian Economic Summit Group (NESG) has forecasted that inflation in Nigeria will average 15.5 percent during the second half of 2026. This projection highlights ongoing economic challenges that the country faces, particularly in major agricultural areas affected by insecurity and climate-related disruptions, such as flooding.

In its latest report titled "Turning Potential into Progress," the NESG outlined several factors contributing to the anticipated inflation. These include high transportation costs linked to logistics difficulties, increased spending related to elections, and seasonal demand during festive periods. The report suggests that these elements could create temporary inflationary pressures in the economy.

Despite these challenges, the NESG noted that certain factors might mitigate the inflationary effects. Continued exchange rate stability, the delayed impacts of a tight monetary policy, and favorable base effects are expected to provide some relief.

The NESG also provided insights into the overall economic growth for Nigeria, projecting a 4.2 percent growth rate for the entire year of 2026. This growth is attributed to improvements in various sectors, including oil, manufacturing, agriculture, and services. The report anticipates that economic growth will strengthen to 4.5 percent in the latter half of the year, reflecting a positive trend in domestic production and a recovery in the oil sector.

The oil industry is expected to benefit from enhanced domestic crude oil production, which is anticipated to improve due to better security conditions and the gradual implementation of upstream reforms. Increased domestic refining activities are also expected to bolster industrial output, reduce reliance on imported refined petroleum products, and enhance Nigeria's external economic position.

Furthermore, the NESG indicated that manufacturing activities are likely to maintain their growth momentum. Factors such as lower inflation rates, stable exchange rates, and improved foreign exchange liquidity are expected to ease production constraints and boost business confidence across the sector.

As Nigeria navigates these economic challenges, the NESG's projections underscore the importance of addressing underlying issues to sustain growth and manage inflation effectively in the coming months.