Economic recovery will impact on banking sector growth, lending strategies in 2026 — First Bank MD, Alebiosu

First Bank last week organised the Nigeria Economic Outlook 2026. It is an annual customer-facing session which sets the tone on prevailing economic realities, equipping First Bank customers with insights to navigate the economy effectively at the start of the year.

The 2026 edition reviewed Nigeria’s economic landscape over the past year, provided an outlook for 2026, and delivered expert perspectives on global and domestic trends and their implications for the nation’s economy in the year ahead.

In a brief interview at the sidelines of the event, Managing Director and Chief Executive of First Bank of Nigeria Olusegun Alebiosu, said the event is targeted at positioning the bank as the partner of choice for personal, business, or corporate financial decisions in 2026. Excerpts:

What is the idea behind the First Bank economic outlook, especially for this year?

As Nigeria’s foremost financial institution, hosting this event enables us to connect with customers and non-customers, providing valuable insights to inform business decisions. Attendees listened to subject matter experts, took part in interactive sessions, and gained actionable knowledge. Delving into critical aspects of the economy, addressing concerns of business owners and CEOs, the session provided a platform to answer economic questions and position the bank as a preferred financial partner.

How would you describe the current economic environment and its outlook for 2026?

The reality is that the economic environment is improving. Inflation is coming down, and with that, interest rates are expected to decline. Once interest rates are lower, lending will naturally increase. This is positive for the economy and for the banking sector.

What does this mean for banks that have just completed their recapitalization?

Banks are now better capitalised and more liquid. They have stronger balance sheets and will be under pressure to grow their loan books and improve their return on equity, which is normal and proper for any business. However, what must be avoided is reckless lending or “gambling.” Growth must be responsible and well-structured. If done properly, increased lending will support economic expansion.

You have advised against holding wealth in foreign currency. Why?

It honestly makes no sense to keep money in foreign currency. The yield on naira assets far, far outpaces foreign currency assets. From Treasury bills to bonds, the stock market and even real estate, naira-denominated investments deliver stronger returns. With the naira appreciating, keeping savings abroad is a waste of time.

The best thing for Nigerians in the diaspora is to bring their money home, invest in local assets, get value for it, and earn good returns. That is how growth is fueled in any economy.

What signs show that the real economy is already responding?

Manufacturing is picking up. If you drive along major expressways, you will see new industrial activities. I have a power company client who told me he has over 500 customers consuming electricity purely for manufacturing. That alone tells you the level of industrial activity going on.

In Aba, the Geometric Power project is active. In Agbara and other areas, you can see growing industrial clusters. These developments are happening across the country. They show that production is increasing, not just trading.

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Prices of some goods are falling. What is driving this?

Prices are not falling by accident. They are falling because people are producing. Take rice for example: two years ago, prices were extremely high. Today, a bag of rice has dropped to around ₦55,000, almost a 50 per cent reduction. PMS has also fallen from about ₦1,000 to around ₦750 per litre.

This shows that supply is improving and market distortions are correcting. Those who hoarded and inflated prices are now losing out.

How do power reforms support this growth?

Decentralising power generation is critical. States can now set up small power plants, even one-megawatt facilities. Once power becomes reliable, manufacturing becomes easier and cheaper, and economic growth accelerates.

What about foreign capital and investor confidence?

Foreign currency inflows are improving. We have trade surpluses, reserves are building up, and portfolio investment is strong. Even the so-called “hot money,” estimated around $10 billion, is no longer a threat. If investors decide to exit, the system can absorb it. That shows resilience.

What is your growth outlook for 2026?

I see Nigeria achieving between 7 and 10 per cent economic growth. Even though 2026 is an election year, I do not expect any crisis. The economy has turned the corner and is recovering. After the elections, growth will accelerate even faster, higher than anything we have seen before. I am very positive about Nigeria’s future.