Author name: The Historica Nigeria

President Bola Ahmed Tinubu has projected that Nigeria’s inflation rate will fall below 10 per cent in 2026, expressing optimism that the development will translate into improved living standards and accelerated economic growth. The projection was conveyed by the Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, in a statement praising corporate Nigeria and key stakeholders in the capital market for surpassing the N100 trillion market capitalisation milestone on the Nigerian Exchange (NGX). According to the statement, the President expressed confidence that ongoing economic reforms would yield greater returns for investors, assuring that 2026 would be a better year for both local and foreign investments. Data from the NGX showed that the market achieved the N100 trillion capitalisation target on Monday, closing at N101.80 trillion. Market capitalisation represents the total value of all outstanding shares listed on the Exchange. President Tinubu described the milestone as an inspiration for investors operating within the money and capital markets, urging Nigerians to deepen their investments in the domestic economy. He assured that 2026 would deliver even stronger outcomes as reforms continue to gain traction. Onanuga said the crossing of the N100 trillion mark signified the birth of a new economic reality and a rejuvenation of investor confidence in Nigeria. Read Also: 300-Year-Old Kano Farming Settlement Faces Extinction Over Sand Mining Nigerian Navy Launches High-Tech Agricultural Initiative to Boost Food Security Fixing the Forgotten Crisis: Solutions to Nigeria’s Herders-Farmers Conflict He noted that while many global markets struggled with stagnation or weak recovery in 2025, the NGX All-Share Index recorded strong growth, closing the year with a 51.19 per cent return, higher than the 37.65 per cent recorded in 2024. He added that year-to-date returns had outpaced those of major global indices, including the S&P 500 and FTSE 100, as well as several emerging market peers. According to him, the performance underscored Nigeria’s growing appeal as an investment destination, reflecting renewed confidence in the broader economy. The President further highlighted strong performances across sectors on the NGX, including industrial firms that have localised supply chains and a banking sector noted for resilience and technological innovation. Tinubu said his administration was only getting started, revealing that the pipeline for new listings remained robust, with indigenous energy firms, technology companies, telecom operators and infrastructure-heavy entities seeking access to the public market to fund expansion. He noted that such listings would further boost market capitalisation and deepen democratic ownership of the economy. He stressed that the government was not celebrating stock market performance in isolation but also the broader microeconomic effects of its reforms, particularly the gradual easing of inflationary pressures after initial headwinds. On inflation, Tinubu projected a sharper decline than earlier forecasts, contrasting his outlook with the Central Bank of Nigeria’s 12.9 per cent projection for 2026. Onanuga explained that monetary tightening and the removal of distortionary Ways and Means financing had helped restore stability to the naira. He added that increased investments in agriculture had contributed to a consistent decline in inflation over the past eight months, from a 24-month high of 34.8 per cent in December 2024 to 14.45 per cent in November 2025, with further moderation expected in 2026. The President also highlighted improvements in Nigeria’s current account position, noting that the country posted a surplus of $16 billion in 2024, with projections indicating a rise to $18.81 billion in 2026. According to him, non-oil exports recorded significant growth, rising by 48 per cent by the third quarter of 2025, while exports to Africa increased by 97 per cent. Manufacturing exports also grew by 67 per cent year-on-year in the second quarter of 2025. Tinubu further disclosed that Nigeria’s foreign reserves had crossed the $45 billion mark, with projections indicating they would exceed $50 billion in the first quarter of 2026, giving the Central Bank increased capacity to maintain macroeconomic stability. He also pointed to ongoing infrastructure expansion, including rail networks, major highways and port revitalisation projects, as part of efforts to strengthen the productive base of the economy and sustain long-term growth.

The Federal Government has clarified that low-income earners will not pay personal income tax under the new tax regime that took effect on January 1, dismissing claims that the reforms impose additional burdens on the poor. Director-General of the Budget Office of the Federation, Tanimu Yakubu, provided the clarification in a statement responding to criticisms he described as based on “stage-managed arithmetic, selective accounting, and misrepresentation of the law.” Yakubu explained that the most critical feature of the new personal income tax structure is the zero per cent tax rate on the first ₦800,000 of annual income, a provision he said critics deliberately ignored. Under the new framework, only income above that threshold is taxable. Using an illustrative example, Yakubu said a worker earning ₦75,000 monthly would have an annual income of ₦900,000, leaving only ₦100,000 above the tax-free band. At a 15 per cent rate on the excess, the worker’s gross tax exposure would amount to ₦15,000 annually, or ₦1,250 per month, before deductions. Read Also: Nigeria Pushes Blue Economy Agenda with Seabed Mapping, Hydrography Initiatives Nigerian Navy Launches High-Tech Agricultural Initiative to Boost Food Security ITF Wraps Up SUPA Skill-Up Artisans Training in Kano, Targets Sustainable Livelihoods He added that once statutory pension contributions are applied, the taxable portion reduces significantly. At an eight per cent pension contribution rate, ₦72,000 would be deducted annually, leaving just ₦28,000 subject to tax, translating to ₦4,200 per year or ₦350 monthly. With additional allowable deductions such as health insurance, the taxable income could fall entirely below the ₦800,000 threshold, resulting in zero personal income tax liability. Yakubu stressed that pension and health insurance contributions should not be misrepresented as taxes, noting that pensions are deferred wages owned by workers and lodged in their Retirement Savings Accounts, while health insurance payments secure defined benefits. He faulted the use of global poverty benchmarks in the criticism, explaining that the World Bank’s $4.20-a-day poverty line is a purchasing power parity measure and not a nominal wage threshold that can be converted directly into naira using market exchange rates. On claims that expanding the tax base would inevitably target the poor, Yakubu described the argument as misleading, stating that tax base expansion focuses on improving compliance among high earners, closing loopholes, capturing affluent segments of the digital and informal economy, and strengthening employer withholding systems. He added that while governance and accountability concerns were legitimate, they did not invalidate the structure of a tax schedule designed to reduce Nigeria’s reliance on borrowing and improve its historically weak tax-to-GDP ratio. According to Yakubu, the narrative branding the reform as a policy designed to tax subsistence incomes ignored clear legal thresholds meant to protect low-income earners, describing such claims as driven more by emotive framing than by facts grounded in law.   (The Nation)