Nigeria’s economy is expected to make a clearer transition from stabilisation to growth, based on projections by the Centre for the Promotion of Private Enterprise (CPPE).
The centre made the forecast in its 2026 economic outlook issued by its Chief Executive Officer, Muda Yusuf, on Sunday.
The non-governmental organisation, which focuses on promoting, protecting, and advancing private enterprise in the Nigerian economy, stressed that Nigeria’s economy will be one of cautious optimism.
“With reform momentum sustained, Nigeria is expected to transition more decisively from stabilisation to growth,” CPPE stated.
It noted that the gross domestic product (GDP) growth is projected to be between 4.0 and 4.5 per cent, supported by continued moderation in inflation and stronger performance in the non-oil sector.
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According to the Centre, moderating inflation should strengthen domestic demand and create room for gradual monetary easing, potentially lowering interest rates and stimulating private investment.
Noting the growth of the services sector — especially telecommunications, finance, construction, real estate and trade — in 2025, it said the sector will remain the primary engine in 2026.
It highlights that the capital market prospects are positive, supported by the potential listing of Dangote Refinery.
It said this could deepen market liquidity and attract domestic and foreign portfolio inflows.
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“Policy credibility remains strong, reinforcing investor confidence and capital inflows,” CPPE stated.
Anticipated risks
It, however, highlighted key risks to the outlook, stating that despite the improving trajectory, several downside risks persist.
These include:
- Security challenges: Insecurity continues to constrain agriculture, logistics and investment.
- Oil price and production volatility: Fiscal performance remains sensitive to oil shocks.
- Structural constraints: High power, energy and logistics costs will continue to weigh on real-sector productivity.
- Debt and fiscal pressures: Debt service—estimated at over ₦15 trillion in the 2026 appropriation (about 50 per cent of projected revenue)—continues to constrain fiscal space.
- External headwinds: Geopolitical tensions could affect trade flows, commodity prices and capital movements.
- Pre-election pressures: Fiscal and political uncertainties in the pre-election year could heighten risks.
- Pushback on tax reforms: Emerging resistance may undermine tax revenue expectations for 2026.
“Overall, 2025 laid a solid foundation of macroeconomic stability. The outlook for 2026 is reassuring, with expectations of stronger growth, easing inflation, improving investor confidence and a gradual shift toward more inclusive expansion.
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“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,” the CPPE added.
It noted 2025 to have been marked by a significant turning point in the country’s macroeconomic trajectory following the turbulence associated with the early phase of reforms.
Specifically, it said exchange-rate stability emerged as the most visible achievement, with the naira largely trading within the ₦1,440–₦1,500/US$ band.
It added that periodic marginal appreciation strengthened business confidence, eased imported inflation and restored predictability to pricing, contracting and investment planning.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
