The Centre for the Promotion of Private Enterprise (CPPE) says Nigeria recorded significant improvements in macroeconomic stability in the first half of 2026.
The Centre, however, warned that the second half of the year would test the government’s ability to convert those gains into stronger business competitiveness, job creation and higher living standards.
CPPE’s position was contained in its half-year review and second-half outlook released on Sunday by its Chief Executive Officer, Dr Muda Yusuf.
According to the group, Nigeria entered the second half of the year with “markedly stronger macroeconomic fundamentals” supported by exchange rate stability, moderating inflation compared with the exceptionally high levels recorded in 2025, stronger external reserves, improved crude oil production and resilient financial markets.
It noted that these developments had reduced macroeconomic vulnerabilities and strengthened investor confidence.
However, it stressed that the gains had yet to produce significant improvements in productivity, employment, competitiveness and household welfare.
“Macroeconomic stabilisation has not yet led to significant, broad-based improvements in productivity, competitiveness, employment and household welfare,” Yusuf said, adding that businesses continue to struggle with high production costs and structural constraints.
The CPPE said economic growth remained positive during the first six months of the year, while the foreign exchange market became more orderly, external reserves improved, and government revenues benefited from stronger oil receipts and non-oil tax collections.
It also noted that financial markets remained resilient as investor confidence and policy credibility improved.
Despite the progress, the report said the real economy remained under pressure as high interest rates continued to limit private sector investment and access to credit.
Manufacturers, farmers and micro, small and medium-sized enterprises also faced rising operating costs driven by expensive energy, inadequate electricity supply, logistics bottlenecks and weak transport infrastructure.
The CPPE further identified insecurity as a major constraint on agricultural production, supply chains and investment across several sectors.
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It maintained that delays in capital project implementation, caused by procurement bottlenecks, funding constraints, and debt-service pressures, also reduced the impact of government spending on economic growth.
The CPPE added that the first half of the year was characterised by stronger macroeconomic stability but only modest improvements in the real economy and household welfare.
Political Risks Cloud Second-Half Outlook
Looking ahead, the CPPE said it remained cautiously optimistic that economic activity would continue to improve in the second half of 2026, driven by financial services, telecommunications, construction, trade, oil refining and other service-sector activities.
Although economic growth is expected to remain below Nigeria’s long-term potential, the organisation said the country is “firmly on a gradual recovery path.”
It projected that inflation would remain substantially lower than in 2025, although food supply disruptions, rising energy costs and developments in global commodity markets remain key upside risks.
It also expressed confidence that exchange rate stability would be sustained through stronger foreign exchange inflows, healthier external reserves and improved market confidence.
According to the CPPE, financial markets are expected to remain resilient, supported by banking sector recapitalisation, stronger corporate earnings, improved regulatory oversight and sustained institutional participation.
It added that improved domestic refining capacity and stronger crude oil production should strengthen government revenues, foreign exchange earnings and energy security.
However, the CPPE warned that political activities ahead of the 2027 general elections could pose significant risks to the economy.
It said election-related spending could increase liquidity in the economy, potentially adding pressure on inflation, foreign exchange demand and macroeconomic management.
It also cautioned that growing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policies.
To sustain the recovery, the CPPE urged the government to focus the next phase of reforms on improving competitiveness by lowering production costs, boosting productivity and strengthening Nigerian businesses.
It called for improvements in electricity supply, transport infrastructure, logistics efficiency and port operations, stronger security in farming communities and transport corridors, wider access to affordable long-term finance for productive sectors, faster budget implementation and greater domestic value addition.
It also advised the government to grow revenue through efficiency-enhancing reforms instead of imposing additional tax burdens while maintaining policy consistency despite increasing political activities ahead of the 2027 elections.
According to Yusuf, “Nigeria enters the second half of 2026 with its strongest macroeconomic fundamentals in several years.”
He, however, stressed that the real measure of success would be whether those gains translate into “stronger business competitiveness, higher private investment, faster job creation and improved living standards.”
The CPPE maintained that sustained reform momentum, stronger implementation capacity, and continued policy consistency would be essential to turning Nigeria’s macroeconomic recovery into broad-based and inclusive economic transformation.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X