CPPE Forcasts Stronger Nigerian Economy in H2, Reviews H1, 2026
- The CPPE has released its performance assessment and outlook for the Nigerian economy, reviewing the first half of 2026
- The think tank expects stronger economic growth in H2 2026, supported by lower inflation and exchange-rate stability
- It noted that businesses continue to face high operating costs due to elevated interest rates, poor infrastructure, among others
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigeria's economy is projected to show better growth in the second half of 2026 due to improved macroeconomic fundamentals and better investor confidence.
These were the views of the Centre for the Promotion of Private Enterprise (CPPE), in its half-year economic review and second-half outlook made available to Legit.ng on Sunday, July 5.
Source: Getty Images
The outlook signed by CPPE Chief Executive Officer Muda Yusuf, however, believes that political activism in the run-up to the 2027 general elections could undermine recovery efforts, with the private sector think tank suggesting the government stay focused on business-enhancing reforms.
Economic outlook
It stated that the Nigerian economy entered the latter half of 2026 with its strongest macroeconomic position in years, evidenced by enhanced foreign exchange reserves, stronger government revenues, stable financial markets and a more orderly FX market.
Yusuf noted:
"The economy appears firmly on a gradual recovery path"
He attributed the outlook for the second half to growth in financial services, telecommunications, construction, trade, oil refining, and other service sectors, albeit below the nation's long-term potential.
The organisation also anticipated lower inflation compared to 2025's high levels, despite risks such as supply chain disruptions, energy price volatility and global commodity market fluctuations.
The think tank added:
"Exchange rate stability is expected to be sustained due to increased forex inflows, robust reserves and heightened market confidence. Financial markets should remain resilient thanks to banking sector capitalisation efforts, stronger corporate earnings, enhanced regulatory oversight and ongoing institutional investment, the think tank added.
Despite the improving macroeconomic landscape, CPPE highlighted continued high production costs for businesses, citing elevated interest rates, unreliable power supply, logistics bottlenecks, transportation infrastructure gaps and insecurity as primary drivers.
It stated:
"Macroeconomic stabilisation has not yet translated into significant, broad-based improvements in productivity, competitiveness, employment and household welfare"
"Manufacturing, agriculture and micro, small and medium-sized enterprises (MSMEs) remain challenged by the high cost of borrowing that dampens private investment and security issues impacting agricultural production and supply chains. Delays in capital projects, funding limitations and increasing debt service expenses have also constrained the efficacy of fiscal policy in stimulating growth."
Source: Twitter
Future expectations for Nigerian economy
Looking ahead, the think tank cautioned that the impending 2027 general elections pose potential economic risks due to increased political activity.
The increased spending associated with elections could inject excess liquidity into the economy, potentially sparking inflationary pressures and heightening demand for foreign exchange.
Yusuf further cautioned:
"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."
CPPE recommends that the next phase of reforms focus on bolstering Nigeria's competitiveness through reducing the cost of doing business, rather than solely relying on macroeconomic stability.
These include improvements in power supply, transportation infrastructure, logistics, port operations, security in farming communities, access to long-term financing, accelerated budget implementation and promotion of domestic value addition.
CPPE also urged the government to boost revenue through efficiency-enhancing reforms instead of imposing additional tax burdens on businesses while maintaining policy consistency throughout the election cycle.
It concluded that while the macroeconomic recovery is an encouraging step, the success of economic management will be measured by its impact on private investment, job creation, productivity and living standards.
External reserves rise above CBN's 2026 target
Earlier, Legit.ng reported that Nigeria's external reserves have increased to $51.06 billion, exceeding the Central Bank of Nigeria's (CBN) year-end target of $51.04 billion.
It has gained 32.62% compared to $38.50 billion in the same period in 2025.
The current reserve level provides the CBN with the buffer to support the naira and settle international obligations.
Source: Legit.ng
