The Centre for the Promotion of Private Enterprise (CPPE) has projected that Nigeria is poised to move from macroeconomic stabilisation to a phase of growth in 2026.
This is according to its latest report titled ‘Review of the Nigerian Economy in 2025 and Outlook for 2026’.
The CPPE projects GDP growth between 4.0 and 4.5 percent in 2026, supported by moderating inflation and stronger non-oil sector performance.
What the report is saying
In the report, Dr. Muda Yusuf, CEO of CPPE, said reforms implemented in 2025 laid a solid foundation for stability, with exchange-rate predictability, easing inflation, and improved investor confidence.
“With reform momentum sustained, Nigeria is expected to transition more decisively from stabilisation to growth,” Yusuf stated.
The year 2025 marked a turning point in Nigeria’s economic trajectory. The naira traded largely within the N1,440–N1,500/US$ band, with periodic appreciation boosting business confidence and easing imported inflation.
Inflation slowed sharply from 24.48% in January to 14.45% by November, aided by currency stability and improved supply conditions. Consumer sentiment strengthened as several food items and imported goods recorded outright price declines.
Business confidence also improved, with the NESG–Stanbic IBTC Business Confidence Index remaining positive for most of the year. Many firms that posted losses in 2024 returned to profitability in 2025.
Fiscal performance: Weak at federal level, stronger in states
Despite stabilisation gains, the report says federal fiscal performance remained weak. Debt-service obligations constrained budget execution, while oil sector underperformance led to missed revenue targets.
The report noted that the 2025 budget assumed US$75 per barrel oil price and 2.06 million barrels per day (mbpd) production. Actual outcomes fell short, with oil averaging US$66 per barrel and production closer to 1.66 mbpd, undermining capital expenditure.
In contrast, sub-national governments recorded stronger fiscal outcomes, with improved liquidity, better internally generated revenue (IGR), and more effective capital project execution.
The services sector remained Nigeria’s growth driver, accounting for 53% of GDP by Q3 2025. Telecommunications, financial services, trade, construction, and real estate led the expansion.
Manufacturing grew by just 1.25%, constrained by power deficits, logistics costs, and weak access to finance. Agriculture grew 3.79%, contributing 31.21% of GDP, but insecurity and low productivity limited its export potential.
Outlook for 2026
CPPE forecasts stronger growth in 2026, driven by services and supported by easing inflation. Yusuf noted that moderating inflation could allow for gradual monetary easing, lowering interest rates and stimulating private investment.
Capital markets are expected to benefit from the potential listing of Dangote Refinery, which could deepen liquidity and attract portfolio inflows.
“Policy credibility remains strong, reinforcing investor confidence and capital inflows,” Yusuf said.
Risks ahead
Despite optimism, CPPE warned of several downside risks:
- Persistent insecurity affecting agriculture and logistics
- Oil price and production volatility
- Structural constraints such as high power and logistics costs
- Debt service pressures, estimated at over N15 trillion in 2026 (about 50% of projected revenue)
- External geopolitical tensions impacting trade and capital flows
- Pre-election fiscal and political uncertainties
- Pushback against tax reforms that could undermine revenue expectations
Dr. Yusuf concluded that 2025 provided a foundation of stability, while 2026 offers cautious optimism for growth.
“If reform momentum is sustained and security challenges are effectively addressed, 2026 could mark the beginning of a more robust growth phase with tangible improvements in living standards,” he said.
What you should know
Earlier in December, CPPE had expressed concerns over the delayed submission of the 2026–2028 Medium-Term Expenditure Framework (MTEF), warning that the lag could undermine legislative scrutiny and weaken the credibility of Nigeria’s budget process.
The organisation stressed that the Fiscal Responsibility Act (FRA) requires the MTEF to be transmitted to the National Assembly at least four months before the beginning of a new fiscal year.
