– Tasks government on policies for more competitive business environment
Dike Onwuamaeze
The Centre for the Promotion of Private Enterprise (CPPE) has declared that the Nigerian economy entered the second half of 2026 with its strongest macroeconomic fundamentals in many years and much strengthened investors’ confidence than at the beginning of the year.
The CPPE however warned that election-related spending could inject additional liquidity into the economy, with possible implications for inflationary pressures, foreign exchange demand and macroeconomic management.
These views were expressed yesterday by the Chief Executive Officer of CPPE Dr. Muda Yusuf, in a press statement titled “Nigeria’s Economy in 2026: Half Year Review and Second-Half Outlook: Macroeconomic Recovery, Structural Reforms and the Competitiveness Imperative.”
Yusuf said that exchange-rate stability, moderating inflation relative to the exceptionally elevated levels of 2025, stronger external reserves, improved oil production and resilient financial markets have reduced macroeconomic vulnerabilities and strengthened investor confidence.
He said: “Nigeria enters the second half of 2026 with its strongest macroeconomic fundamentals in several years.
“This represents an important policy achievement and provides a stronger platform for investment and economic recovery.
“With respect to the outlook for the second half of 2026, the CPPE remains cautiously optimistic.
“Economic output performance is expected to remain positive, supported by financial services, telecommunications, construction, trade, oil refining and other service-sector activities.
“Although growth is likely to remain below Nigeria’s long-term potential, the economy appears firmly on a gradual recovery path.”
He also said that inflation is expected to remain substantially below 2025 levels in the H2 2026, although food supply disruptions, energy costs and developments in global commodity markets remain important upside risks.
Yusuf added: “Exchange-rate stability should be sustained by stronger foreign exchange inflows, healthier reserves and improved market confidence.”
According to him, financial markets are expected to remain broadly resilient, supported by banking-sector recapitalisation, stronger corporate earnings, improved regulatory oversight and sustained institutional participation.
He added that improved domestic refining capacity and stronger crude oil production should also support fiscal revenues, foreign exchange earnings and energy security.
Yusuf, however, said that macroeconomic stabilisation has not yet led to significant, broad-based improvements in productivity, competitiveness, employment and household welfare.
According to him, businesses have continued to grapple with elevated production costs and structural bottlenecks.
He, therefore, said that the “defining policy challenge for the remainder of 2026 is to convert improved macroeconomic conditions into inclusive, investment-driven and productivity-enhancing growth.”
He noted that the more fundamental challenge is ensuring that these gains are reflected in stronger business competitiveness, higher private investment, faster job creation and improved living standards.
“The quality of economic management in the remainder of 2026 will therefore be judged less by the stability of macroeconomic indicators than by the extent to which structural reforms improve productivity and reduce the cost of doing business,” Yusuf said.
The CPPE however warned that the increasing intensity of political and electioneering activities ahead of the 2027 elections would present an important downside risk in the remaining part of this year.
It said: “Election-related spending could inject additional liquidity into the economy, with possible implications for inflationary pressures, foreign exchange demand and macroeconomic management.
“There is also a risk that growing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policy initiatives.”
Reviewing the first half of 2026 (H1 2026), Yusuf that the period reflected continued progress in macroeconomic stabilisation.
He said that economic growth remained positive, the foreign exchange market became more orderly, external reserves improved, crude oil production strengthened modestly and government revenues benefited from improved oil receipts and stronger non-oil tax collections during the period under review.
But despite these encouraging developments, Yusuf said that the real economy remained under considerable pressure, which was characterised by high interest rates that constrained private-sector investment and access to credit, while elevated energy costs, inadequate electricity supply, logistics inefficiencies and weak transport infrastructure sustained a high-cost operating environment.
He said that in order to ensure competitiveness in the H2 2026, the next phase of reform should focus on lowering production costs, improving productivity and strengthening the competitiveness of Nigerian enterprises.
“Priority should be given to improving electricity supply, transport infrastructure, logistics efficiency, and port operations; strengthening security in farming communities and along transport corridors; expanding access to affordable long-term finance for productive sectors; accelerating budget implementation, strengthening budget process credibility, and improving infrastructure delivery; and deepening domestic value addition.
“Government revenue should increasingly be driven by efficiency-enhancing reforms rather than additional tax burdens, while policy consistency should be preserved despite increasing political activity ahead of the 2027 elections.
“It is equally important to minimise governance distractions and ensure that electioneering does not weaken the pace of reforms, budget implementation or the quality of economic management,” he said.