Bank Recapitalisation To Fuel Bullish Capital Market In 2026 – CBN

The Central Bank of Nigeria expects the country’s capital market to remain bullish in 2026, driven largely by the ongoing bank recapitalisation programme, improving investor confidence and supportive policy actions.

The projection is contained in the CBN’s latest report titled: ‘Macroeconomic Outlook for Nigeria, 2026: Consolidating Macroeconomic Stability Amid Global Uncertainty.’According to the apex bank, stronger bank balance sheets will play a central role in deepening market activity and sustaining positive sentiment across the equities and fixed income markets.

The CBN said the recapitalisation exercise would strengthen the financial system, improve resilience and enhance the capacity of banks to support economic growth. With stronger capital buffers, banks are expected to participate more actively in the capital market, both as issuers and intermediaries, helping to sustain momentum.

Why recapitalisation matters for the market

For the capital market, bank recapitalisation often triggers increased activity. Banks seeking fresh capital typically turn to equities and other market instruments, which boosts listings, trading volumes and overall market depth. At the same time, stronger banks improve confidence among domestic and foreign investors, who see recapitalisation as a sign of regulatory discipline and long-term stability.

The CBN believes this dynamic will support a positive market outlook in 2026, even as global financial conditions remain uncertain.

Broader economic backdrop

The bullish capital market outlook is anchored on a wider economic expansion. The CBN projects Nigeria’s economy will grow by 4.49 percent in 2026, up from an estimated 3.89 percent in 2025. This growth is expected to be driven by structural reforms, improved policy coordination and a gradual easing of monetary conditions.

Inflation is also expected to slow. The CBN forecasts headline inflation will moderate to an average of 12.94 percent in 2026, supported by lower food prices and reduced fuel costs. Improved domestic refining capacity and better supply conditions are expected to ease price pressures, creating a more supportive environment for businesses and investors.

Implications for investors and households

For investors, a bullish market supported by bank recapitalisation presents opportunities, particularly in the banking and financial services sector. Stronger capital positions could translate into improved earnings capacity, better risk management and more sustainable growth over time.

For households, the impact is less direct but still important. A healthier banking sector can support credit growth to businesses, which may lead to job creation and higher incomes. Pension funds and other institutional investors, which invest heavily in the capital market, could also benefit from stronger market performance, supporting long term savings.

External position and key risks

On the external front, the CBN expects continued improvement. External reserves are projected to rise to 51.04 billion dollars in 2026, supported by stronger exports, steady remittance inflows and increased oil and gas production. The current account surplus is forecast to grow to 18.81 billion dollars.

However, the central bank warned that risks remain. Inflationary pressures could reemerge, global financial markets may remain volatile and geopolitical tensions could disrupt capital flows. Domestically, any disruption to crude oil production could weaken external earnings and affect overall stability.

Despite these challenges, the CBN said it remains committed to maintaining price stability while supporting economic growth. The bank noted that it would continue to deploy appropriate policy tools to attract foreign investment, stabilise the exchange rate and strengthen confidence in Nigeria’s financial markets.