Uncertainty persists in 2026, diversify now — Comercio Partners urges investors

2026-03-03 - 10:08

By Babajide Komolafe Comercio Partners has advised retail and institutional investors to prioritise diversification in 2026, warning that lingering domestic and global uncertainties could heighten market volatility, particularly as Nigeria approaches another pre-election cycle. The firm gave the advice in its 2026 Macroeconomic Outlook, where it projected moderating inflation, gradual monetary easing and steady economic growth, but cautioned that risks remain elevated. The financial services firm noted that although macroeconomic stability has improved significantly compared to the turbulence of 2024, the investment landscape remains fragile. “We are still operating in a world of uncertainty,” it said. “Neither analysts nor policymakers can predict with certainty what will happen in the next few months. That is why diversification remains the most important strategy for investors in 2026.” According to the outlook, Nigeria’s inflation rate, which spiked above 30 per cent during the peak of reform adjustments, is now on a moderating path. The firm projects inflation could fall to between 10 and 11 per cent in the best-case scenario in the first half of 2026, while the base case estimate stands at around 16 per cent. In a worst-case scenario driven by oil price shocks, insecurity or policy misalignment, inflation could rise to between 18 and 22 per cent. On growth, Comercio Partners expects the economy to expand by 4.5 per cent under its base case, with upside potential of five per cent if oil production strengthens and agricultural output improves. However, it warned that pre-election uncertainties and global geopolitical tensions could weigh on investor confidence. The firm noted that after two years of elevated interest rates that pushed many investors into fixed income instruments such as Treasury Bills and commercial papers, the expected gradual rate cuts by the Central Bank of Nigeria in 2026 may shift capital allocation patterns. With the Monetary Policy Rate currently at about 26 per cent following a modest year-end cut in 2025, Comercio Partners expects two to three additional rate cuts in 2026, potentially bringing the benchmark rate down to between 23.5 and 25 per cent. Despite this anticipated easing, Ologunagbe cautioned against abandoning fixed income assets entirely. “Investors should avoid concentrating their portfolios in one asset class. While equities may continue to benefit from improving corporate earnings and pension fund participation, fixed income still offers stability. A balanced portfolio helps cushion shocks,” he said. The firm also expects more moderate returns on the Nigerian Exchange in 2026 after a strong 51 per cent rally in 2025. It warned that capital flight risks could resurface in the third and fourth quarters as political activities intensify ahead of the general elections. On the exchange rate, Comercio Partners projected a base case range of ₦1,400 to ₦N1,450 per dollar, with a stronger outcome of N1,200 possible under favourable oil and capital inflow conditions. While acknowledging the progress made through foreign exchange reforms and improved policy coordination, the firm stressed that geopolitical tensions, oil price volatility and domestic political dynamics remain key risk factors. “The message is simple. Diversification is not optional in 2026. It is essential,” the company averred.