Nigeria’s poverty rate is projected to remain broadly unchanged at 63 percent in 2026 despite improvements in macroeconomic stability, underscoring the difficulty of translating lower inflation, a more stable naira and stronger economic growth into better living conditions for households, according to Strategyand’s H2 2026 Nigeria Economic Outlook.
‘Poverty rates remain elevated and are projected to remain broadly unchanged in 2026, indicating limited gains from the recent macroeconomic stabilisation,’ Strategyand said.
The report also noted that undernourishment increased from 10.8 percent in 2015-2017 to 19.9 percent in 2022-2024, reflecting continued pressure on household food affordability and access.
The weak transmission from macroeconomic stability to household welfare comes even as Nigeria enters the second half of the year with a more favourable economic outlook.
Strategyand projects the economy to grow by 4.2 percent in H2 2026, supported by higher crude oil production and stronger performance in dominant sectors.
It expects inflation to moderate further, while the naira is projected to remain broadly stable, although vulnerable to global oil prices, capital flows and domestic foreign-exchange demand.
Households continue to face pressure from food, housing and energy costs. Food inflation rose to 17.52 percent in June, while housing inflation increased to 14.81 percent. The cost of a healthy diet also rose to N1,589 per adult per day in April, up 4.68 percent from a year earlier.
The report also highlights worsening food insecurity, with undernourishment rising from 10.8 percent in 2015-2017 to 19.9 percent in 2022-2024. Energy costs remain another major burden, as diesel prices rose 43.67 percent year-on-year in April, alongside increases in kerosene, petrol, and LPG prices.
Strategyand therefore argues that macroeconomic stability alone may not be enough to improve living standards quickly, with lower food and energy costs crucial to translating economic recovery into better household welfare.
Growth is improving but not felt yet
Nigeria’s real GDP grew 3.89 percent year-on-year in Q1 2026, compared with 3.13 percent in Q1 2025.
ICT, finance and insurance, construction and agriculture were the main contributors, growing by 10.98 percent, 8.54 percent, 6.38 percent and 3.15 percent, respectively.
However, Strategyand said growth remains concentrated across a narrow set of sectors. Electricity contracted by 15.30 percent, while oil and gas grew by 2.57 percent. Trade and real estate also recorded relatively weak growth amid high operating, logistics, financing and building costs.
This concentration matters for the poverty outlook because the report identifies limited income and employment gains, high essential costs and weak consumer credit as factors holding back household spending.
Credit constraints could slow broader recovery
Businesses, particularly MSMEs, also face difficulty accessing affordable finance. Private-sector credit stands at 21.3 percent of GDP, below the sub-Saharan African average of 33 percent.
Strategyand identified a financing gap for businesses seeking between N500,000 and N30 million, between the typical lending ranges of microfinance institutions and commercial banks.
Credit to government increased by 18 percent between December 2025 and May 2026, compared with 6.9 percent growth in private-sector credit. Private-sector credit also declined by 14.3 percent between February and May 2026.
The report argues that closing this financing gap through targeted credit windows, guarantees and blended finance would help support working capital, business expansion and investment.
Foreign capital inflows remain dominated by portfolio investment
Foreign capital inflows strengthened in the first quarter of 2026, rising 83.8 percent year-on-year to $10.37 billion, another indication of improving investor confidence. However, the inflows remain dominated by short-term portfolio investment, which accounted for 95.1 percent of the total, while foreign direct investment contributed just 1.3 percent.
Strategyand says Nigeria needs to turn this investor interest into longer-term productive investment by improving policy certainty, developing more bankable projects and addressing bottlenecks around approvals, land, financing and foreign exchange.
Infrastructure and insecurity remain major obstacles to investment and productivity. Nigeria ranked 68th out of 70 economies in the 2026 IMD competitiveness ranking and 70th on infrastructure, while insecurity was identified as the biggest business constraint in the May 2026 survey, with a score of 72.9.
For the second half of 2026, Strategyand therefore sees a more stable and faster-growing economy, but one that still faces challenges in translating macroeconomic gains into better living standards. It recommends targeted household support, lower food costs through improved agricultural productivity and logistics, stronger domestic energy supply, greater access to private-sector credit and faster investment in productive sectors.