The Centre for the Promotion of Private Enterprise (CPPE) has released its half-year economic review and second-half outlook for Nigeria, projecting stronger growth in the latter part of 2026 driven by improved macroeconomic fundamentals and heightened investor confidence.
The think tank, in its report made available to Legit.ng on Sunday, July 5, noted that the Nigerian economy entered the second half of 2026 with its strongest macroeconomic position in years, evidenced by enhanced foreign exchange reserves, stronger government revenues, stable financial markets, and a more orderly foreign exchange market.
Key Drivers of Growth
According to the CPPE, the improved outlook is attributed to growth in financial services, telecommunications, construction, trade, oil refining, and other service sectors, albeit below the nation's long-term potential. The organisation also anticipates lower inflation compared to the high levels recorded in 2025, despite risks such as supply chain disruptions, energy price volatility, and global commodity market fluctuations.
Muda Yusuf, Chief Executive Officer of CPPE, stated: "The economy appears firmly on a gradual recovery path." He further noted that exchange rate stability is expected to be sustained due to increased forex inflows, robust reserves, and heightened market confidence.
Persistent Challenges for Businesses
Despite the improving macroeconomic landscape, the CPPE highlighted that businesses continue to face high operating costs. Elevated interest rates, unreliable power supply, logistics bottlenecks, transportation infrastructure gaps, and insecurity remain primary drivers of these costs.
The report stated: "Macroeconomic stabilisation has not yet translated into significant, broad-based improvements in productivity, competitiveness, employment and household welfare." It added that manufacturing, agriculture, and micro, small, and medium-sized enterprises (MSMEs) remain challenged by the high cost of borrowing, which dampens private investment, and security issues impacting agricultural production and supply chains.
Delays in capital projects, funding limitations, and increasing debt service expenses have also constrained the efficacy of fiscal policy in stimulating growth.
Election-Related Risks
Looking ahead, the CPPE cautioned that the impending 2027 general elections pose potential economic risks due to increased political activity. The increased spending associated with elections could inject excess liquidity into the economy, potentially sparking inflationary pressures and heightening demand for foreign exchange.
Yusuf further cautioned: "There is also a risk that growing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policy initiatives." He urged the government to stay focused on business-enhancing reforms.
Recommendations for Future Reforms
The CPPE recommends that the next phase of reforms focus on bolstering Nigeria's competitiveness through reducing the cost of doing business, rather than solely relying on macroeconomic stability. Specific recommendations include improvements in power supply, transportation infrastructure, logistics, port operations, security in farming communities, access to long-term financing, accelerated budget implementation, and promotion of domestic value addition.
The think tank also urged the government to boost revenue through efficiency-enhancing reforms instead of imposing additional tax burdens on businesses, while maintaining policy consistency throughout the election cycle.
It concluded that while the macroeconomic recovery is an encouraging step, the success of economic management will be measured by its impact on private investment, job creation, productivity, and living standards.
