KPMG: Political Spending to Drive Inflation and Instability

KPMG has indicated that political spending in Nigeria as the country approaches the 2027 general elections will likely result in inflation, foreign exchange instability, and increased cost pressures in 2026. Mr. Oluwol Adelokun, a partner at KPMG West Africa, noted that the ongoing counter-insurgency campaign in Nigeria could heighten risks of sabotage and affect operational continuity, especially in areas with significant geographical spread.

The 2026 budget will be a critical test for the federal government's commitment to macroeconomic reforms amidst potential political spending pressures. KPMG forecasts a growth rate of 4.5% for the Nigerian economy in 2026, supported by less restrictive credit conditions and sustained investment.

Inflation is expected to decline to an annual average of approximately 11% to 13% in 2026, with the naira projected to stabilize at an average of N1,400 per dollar. Additionally, Mr. Lawrenc Amadi from PwC emphasized the importance of embedding AI in governance processes to enhance decision-making.