The security situation is likely to deteriorate further in 2026. There are various factors at play, including tensions around election campaigns, the politicisation of the security situation, the jailing of the leader of the Indigenous People of Biafra (IPOB), Nnamdi Kanu, jostling by militants for political recognition in the oil-producing Niger Delta, and the ever-worsening security environment in neighbouring nations. 

Tinubu and state governors are likely to focus less on tackling insecurity as the campaign season intensifies next year. This will provide space for non-state actors to intensify attacks, while political campaigns will likely fuel ethnic and religious divisions, potentially providing the trigger for violent internecine clashes. 

The jailing of Kanu remains a trigger for violence in the Southeast. Security agents are likely to continue to be targets for gunmen claiming to be fighting for an independent Biafra. It is likely that politicians who are not seen to support the separatist IPOB agenda will also become targets. 

In the oil producing Niger Delta, there is an increased likelihood of attacks on oil facilities as different militants jostle for political influence and try to win government pipeline protection contracts. Already, the Nigerian National Petroleum Company Limited (NNPCL)  reported an explosion on its Escravos-Lagos gas pipeline on 11 December. The NNPCL did not disclose the cause which disrupted gas supply on the critical pipeline.

Similarly, Islamic insurgents fighting in the Sahel are likely to increasingly set their eyes on Nigeria as neighbouring nations, including Burkina Faso, Mali and Niger, struggle to contain them. The three countries are looking ever more vulnerable to the insurgents even as they antagonise Nigeria and curb security collaboration. A further erosion of governance in the three countries will create a power vacuum, allowing the insurgents to spread their cause across the wider region. 

Return to single digit inflation

2026 is likely to see Nigeria’s economy returning to single digit inflation. It last saw single digit inflation in October 2020 before prices accelerated, peaking at 34% in December 2024. The inflation rate has trended downwards since January 2025, hitting a low of 14.5% in November. There is expected to be a little spike in December due to end of year inflationary pressures and data adjustment. However, the index is expected to start trending downwards from January once more.

Naira likely to remain stable

With inflation trending downwards, the naira is expected to remain largely stable in 2026. The currency will likely stay in the ₦1,400 to ₦1,500 to the US$ range, which the central bank now sees as a sweet spot for investors, exporters and importers. The currency’s stability will help companies plan better and drive new investments. It is likely to also be positive for the stock market, which could see another year of positive acceleration.

Fuel prices to also stay stable

The battle for market share between importers and marketers of petroleum products and the Dangote Refinery will ensure that petrol prices remain affordable for the better part of next year. Petrol prices will likely remain below ₦1,000 (US$0.69) per litre for most of next year, helping keep food prices low.

The December 2025 issue of Nigeria Focus also includes the following:

Spotlight

• Outlook for 2026: APC looks strong ahead of pre-election year
• PDP unlikely to resolve issues before primaries
• ADC likely to field Abubakar forcing Obi out
• Implications
• APC to win gubernatorial election in Ekiti, while Osun to be marred by violence
• Tinubu’s health remains a concern 
• Deterioration in the security situation

Profile

• Christopher Musa from CDS to Defence chief

Politics

• Tinubu’s interference in Benin provokes Sahel’s military dictators 
• A fading PDP

Economy

• Tinubu surprises with a conservative pre-election year budget 
• Numbers
• New payment reforms likely to boost revenue

Energy

• More concerns over Dangote’s RFCCU
• Oil bid round likely to see oil majors participate 
• Why oil production remains challenging
• New gas trading platform could be a game changer

Security

• US data may be helping Nigeria attack ISWAP positions in the North