Nigeria's economic landscape has witnessed a notable surge in capital inflows, which increased by 83.8 percent to reach $10.37 billion in the first quarter of 2026. However, this growth is overshadowed by a concerning statistic: foreign direct investment (FDI) accounted for a mere 1.3 percent of the total inflows, raising alarms about the country's ability to translate macroeconomic improvements into widespread prosperity.

According to the latest report from PwC, while the country's economic reforms have bolstered key macroeconomic indicators, the benefits have not yet permeated into enhanced living standards for the majority of Nigerians. The report highlights that poverty levels are projected to remain alarmingly high at 63 percent this year, despite improvements in foreign exchange liquidity, reserves, and inflation rates.

In the first quarter of 2026, Nigeria's real Gross Domestic Product (GDP) grew by 3.89 percent year-on-year, a rise from 3.13 percent in the same period last year. Additionally, headline inflation moderated to 15.91 percent in June, and the naira strengthened against the dollar, moving from ₦1,529.70/$ to ₦1,379.68/$. Foreign exchange reserves also saw a significant increase, climbing 38.3 percent year-on-year to reach $51.46 billion. Market capitalisation surged by 93.8 percent year-on-year, reaching ₦147.2 trillion.

Despite these positive indicators, the report warns that improved macroeconomic stability has not resulted in enhanced household welfare. Food inflation has risen to 17.52 percent, and the cost of a healthy diet has increased by 4.68 percent year-on-year. The purchasing conditions for consumer goods, including motor vehicles and property, remain weak, indicating that many Nigerians are still facing economic hardships.

The sharp rise in capital importation is primarily attributed to foreign portfolio investors, who contributed $9.86 billion, or 95.1 percent of the total inflows. In stark contrast, FDI only amounted to $135.08 million. This disparity highlights the urgent need for Nigeria to convert the strong interest from investors into long-term capital by enhancing policy certainty and developing bankable projects.

PwC's report also points to limited access to affordable finance as a significant barrier to private-sector expansion. Currently, private-sector credit stands at 21.3 percent of GDP, falling short of the 33 percent average for Sub-Saharan Africa and the 47 percent average for lower-middle-income economies. The financing gap is particularly pronounced, with most microfinance institutions lending up to ₦500,000, while commercial banks focus on larger loans of ₦30 million and above.

Infrastructure weaknesses further hinder Nigeria's economic growth, as the country ranks 68th out of 70 in the 2026 IMD competitiveness ranking. The power sector remains a critical issue, with 5.06 million out of 12.38 million active electricity customers unmetered, and losses in the sector reaching 37.44 percent.

Looking ahead, PwC projects an economic growth rate of 4.2 percent for the second half of 2026, driven by increased crude oil production and stronger performance in key sectors. However, inflation may face pressures from various factors, including supply shocks and pre-election spending. The Central Bank of Nigeria is expected to maintain a tight monetary policy, with potential for gradual rate cuts if disinflation trends continue. The report emphasizes that the immediate policy focus should shift from mere macroeconomic stabilization to fostering inclusive growth, safeguarding household purchasing power, expanding affordable credit, and improving infrastructure and security.