The Centre for the Promotion of Private Enterprise (CPPE) has projected a cautious but steady recovery for Nigeria’s economy in the second half of 2026, while warning that rising political activities ahead of the 2027 general elections could undermine macroeconomic stability and slow ongoing economic reforms.
The outlook is contained in the CPPE’s half-year economic review. According to the economic policy think tank, growth during the second half of the year is expected to be driven by the financial services, telecommunications, construction, trade and oil refining sectors.
CPPE expects inflation to remain well below 2025 levels, supported by improved macroeconomic conditions.
The organisation also projected continued exchange-rate stability, underpinned by stronger foreign exchange inflows and rising external reserves.
It added that the financial markets are likely to remain resilient as banking sector recapitalisation gathers momentum and stronger corporate earnings continue to support investor confidence.
Despite the positive outlook, CPPE warned that increasing political activities ahead of the 2027 elections could create fresh economic pressures.
According to the report, election-related spending could inject significant liquidity into the economy, potentially fuelling inflation, increasing demand for foreign exchange and complicating macroeconomic management.
The think tank also cautioned that political campaigns and election preparations could distract policymakers from implementing critical reforms and executing key government programmes.
“The defining policy challenge for the remainder of 2026 is therefore to convert improved macroeconomic conditions into inclusive, investment-driven and productivity-enhancing growth,” the report stated.
Reviewing developments in the first half of 2026, CPPE said Nigeria entered the second half of the year with stronger macroeconomic fundamentals than it had at the beginning of the year.
Among the key improvements highlighted were:
- Greater exchange-rate stability.
- Higher crude oil production.
- Improved external reserves.
- Resilient financial markets.
- Increased government revenues from both oil and non-oil sources.
However, the organisation stressed that these gains have yet to translate into broad-based improvements in the real economy.
According to the report, elevated interest rates continue to discourage private-sector investment, while high energy costs, unreliable electricity supply, logistics bottlenecks and insecurity are raising operating costs for manufacturers, farmers and micro, small and medium-sized enterprises (MSMEs).
CPPE also noted that capital expenditure remains below expectations due to procurement delays and the heavy burden of debt servicing.
