The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, says Nigeria’s next phase of economic reform should focus on industrialisation, power sector reforms, productivity growth and export competitiveness despite signs of economic recovery in the first quarter of 2026.
In a policy brief he released on Thursday on Nigeria’s latest Gross Domestic Product (GDP) report, Yusuf said the economy remained on a gradual recovery path but warned that structural weaknesses could threaten sustainable growth.
“The next phase of economic reform should therefore focus more deliberately on productivity enhancement, industrialisation, power sector reforms, export competitiveness and inclusive growth,” he said.
His position followed the National Bureau of Statistics’ (NBS) report showing that Nigeria’s economy grew by 3.89 per cent in the first quarter of 2026, higher than the 3.13 per cent growth recorded in the same period of 2025, although slightly below the 4.0 per cent growth posted in the fourth quarter of last year.
He said the growth performance reflected “continued macroeconomic stabilisation, improving business confidence and the resilience of key non-oil sectors.”
He noted that the services sector remained the main engine of growth, supported by strong performances in ICT, financial services, trade, entertainment and construction.
However, he argued that trade and services alone cannot deliver lasting economic transformation.
“Sustainable economic transformation cannot be driven by commerce alone,” Yusuf said.
“Long-term growth resilience requires stronger productive capacity, deeper industrialisation, and significantly higher domestic value addition.”
The CPPE chief described the modest recovery in manufacturing as encouraging but fragile.
He explained that although the sector grew by 3.29 per cent, its contribution to GDP remained below 10 per cent because of high energy costs, weak infrastructure, elevated interest rates, logistics challenges and policy uncertainty.
“The economy cannot achieve durable structural transformation without a stronger manufacturing base,” Yusuf said, adding that industrialisation remains the most reliable route to job creation, export competitiveness and inclusive growth.
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He highlighted the strong performance of domestic refining, which expanded by 37.46 per cent in the first quarter, the highest growth recorded by any sector during the period.
He said the development underscored the growing importance of local refining to energy security, industrialisation, import substitution, and foreign exchange conservation, noting that the Dangote Refinery’s operations largely drove the sector’s performance.
Despite the dominance of the non-oil economy, which accounted for 96.08 per cent of GDP, Yusuf pointed to a major imbalance in Nigeria’s economic structure.
According to him, the non-oil sector contributes less than 15 per cent of foreign exchange earnings, reflecting weak export competitiveness and low integration into global value chains.
He identified the sharp 15.30 per cent contraction in the electricity and gas sector as the most worrying aspect of the GDP report.
“This underscores the deepening fragility of Nigeria’s power sector and raises serious concerns about the sustainability of economic growth, industrial productivity and business competitiveness,” Yusuf said.
He warned that unreliable electricity supply was worsening production costs for businesses already struggling with high borrowing costs, logistics expenses and weak consumer demand.
“Without reliable, affordable and stable electricity, gains recorded in other sectors may prove difficult to sustain,” he stated.
The CPPE chief also raised concerns over the aviation sector’s contraction and the continued weakness of the textile industry, describing them as signs of mounting pressure on productive sectors and ongoing deindustrialisation.
He further called for policy attention to the oil and gas sector after its growth slowed sharply to 2.57 per cent in the first quarter from 6.79 per cent in the preceding quarter.
While welcoming the GDP growth numbers, Yusuf stressed that economic performance must translate into better living conditions for Nigerians.
“Economic growth must ultimately translate into improved living conditions, stronger purchasing power and better welfare outcomes for citizens. Growth without inclusion delivers limited economic and social dividends,” he added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X