The Centre for the Promotion of Private Enterprise (CPPE) has released a cautiously optimistic projection for Nigeria's economic performance in 2026, forecasting a gross domestic product (GDP) growth rate of between 4.0 and 4.5 per cent. This outlook was detailed in the centre's review of the 2025 economy and its expectations for the coming year.
A Foundation of Stability in 2025
According to the CPPE, the year 2025 represented a significant turning point for Nigeria's macroeconomic direction. The organisation noted that the country began to move past the initial turbulence linked to early-stage reforms. A standout achievement was the remarkable stability of the exchange rate, with the Nigerian naira largely trading within a band of N1,440 to N1,500 per US dollar.
This currency stability had multiple positive effects. Periodic appreciations boosted business confidence, helped to reduce imported inflation, and restored predictability for pricing, contracting, and investment planning. Furthermore, inflation saw a sharp deceleration, falling from 24.48 per cent in January 2025 to approximately 14.45 per cent by November of the same year.
The slowdown in inflation was driven by the stable naira, easing pressures on logistics, and generally improved supply conditions. The CPPE report highlighted that several food items and imported consumer goods even experienced outright price declines, which improved consumer sentiment and reduced market volatility.
Persistent Challenges and Fiscal Weakness
Despite the progress in macroeconomic stabilisation, the CPPE identified ongoing weaknesses, particularly at the federal level. Fiscal performance remained subdued, heavily constrained by massive debt-service obligations that limited the government's budgetary flexibility. Revenue collection also continued to underperform, a situation largely attributed to sub-optimal output and performance in the crucial oil sector.
In contrast, the report noted that state governments, or sub-national entities, recorded relatively stronger fiscal outcomes. Improved liquidity, better internally generated revenue (IGR), and more effective execution of capital projects allowed many states to deliver more tangible infrastructure and social services to their residents.
Key Risks to the 2026 Outlook
Looking ahead, the CPPE, led by its Chief Executive Officer, Dr. Muda Yusuf, warned that several downside risks could threaten the projected growth in 2026. The centre's document outlined major concerns that require urgent attention:
- Insecurity: Continuing to hamper agricultural output, logistics networks, and new investments.
- Fiscal Vulnerabilities: Government finances remain highly sensitive to potential shocks in the global oil market.
- High Costs: Elevated expenses for power, energy, and logistics will continue to burden productivity in the real sector of the economy.
- Debt Burden: Debt service, estimated at over N15 trillion in the 2026 appropriation (roughly 50% of expected revenue), will severely limit fiscal space.
- Other risks include geopolitical tensions, fiscal and political uncertainties in a pre-election year, and emerging resistance to new tax laws which may undermine revenue targets.
Pathway to a Robust Growth Phase
The CPPE concluded that the overall foundation laid in 2025 sets a reassuring stage for 2026. The centre anticipates stronger economic growth, a continued easing of inflationary pressures, improving investor confidence, and a gradual shift towards more inclusive economic expansion.
The report emphasised that if the current reform momentum is maintained and the nation's security challenges are effectively addressed, 2026 could mark the beginning of a more robust and sustainable growth phase for Nigeria, with tangible improvements in the living standards of its citizens.
