By Babajide Komolafe
Group Chief Economist at Afreximbank, Dr Yemi Kale, has warned that Nigeria’s emerging macroeconomic stability could be short-lived without sustained policy discipline, stressing that credibility remains critical to attracting long-term capital and shielding the economy from external shocks.
Speaking at the FirstBank 2026 Nigerian Economic Outlook session, Kale said recent improvements in inflation trends and foreign exchange stability reflect the early gains of ongoing reforms, but cautioned that these gains must be consolidated through consistent fiscal management and deeper structural changes.
According to him, Nigeria is operating in a global environment where growth, inflation and capital flows no longer move in tandem, making policy credibility and coordination more important than ever. He said economies that fail to maintain discipline risk reversing hard-won progress, particularly in an era of volatile capital movements.
Kale noted that tighter monetary policy and reforms in the foreign exchange market have contributed to moderating inflation and reducing volatility in the naira, helping to rebuild investor confidence. He added that the shift to market-driven exchange rate formation has improved transparency and strengthened price discovery, encouraging better inflows and liquidity conditions.
He explained that the recent easing of monetary policy—the first in five years—signals growing confidence that inflation is on a downward path, but warned that premature policy reversals could undermine stability. Sustained coordination between monetary and fiscal authorities, he said, is essential to keeping inflation expectations anchored. On the structure of growth, Kale said Nigeria’s economy is more diversified than often assumed, with services such as ICT, digital payments, logistics and trade now accounting for the largest share of output. However, he noted that oil remains vital for foreign exchange earnings and government revenues, making prudent management of oil proceeds crucial.
Also speaking, Managing Director and Chief Executive Officer of First Bank of Nigeria, Mr Segun Alebiosu, stressed the role of FirstBank in supporting the economy’s next phase of growth: “At FirstBank, resilience is not just a slogan—it is a legacy. We remain committed to being capital strong, digitally enabled, and ready to partner with Nigeria as it navigates its next phase of development.”
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