CPPE projects 4.5% GDP growth in 2026

The Centre for the Promotion of Private Enterprise (CPPE) has projected that Nigeria’s economy could grow by as much as 4.5 per cent in 2026, riding on sustained macroeconomic reforms, moderating inflation, exchange-rate stability and improved performance of the non-oil sector.

The projection was contained in CPPE’s Review of the Nigerian Economy in 2025 and Outlook for 2026, released by its Chief Executive Officer, Dr. Muda Yusuf yesterday.

According to the centre, Nigeria is poised to transition from macroeconomic stabilisation to a more robust growth phase, provided current reform momentum is sustained and key risks are effectively managed.

CPPE described 2025 as a “turning point” in Nigeria’s macroeconomic journey, following the turbulence that accompanied the early phase of economic reforms.

One of the most visible achievements of the year, the group noted, was the relative stability of the exchange rate, with the naira largely trading within the N1,440–N1,500 per US dollar band.

It observed that periodic marginal appreciation of the naira during the year helped to strengthen business confidence, ease imported inflation and restore predictability to pricing, contracting and investment planning.

This stability, it added, played a critical role in dampening inflationary pressures across the economy.

According to CPPE, headline inflation decelerated sharply from 24.48 per cent in January 2025 to about 14.45 per cent by November.

The moderation was attributed to exchange-rate stability, easing logistics pressures and improved supply conditions.

The organisation noted that several food items and imported consumer goods recorded outright price declines, contributing to improved consumer sentiment and reduced price volatility.

Business confidence also improved materially during the year. CPPE cited the NESG–Stanbic IBTC Business Confidence Index, which remained positive for most of 2025, as evidence of improved investor perception and a gradual recovery in corporate profitability. Many firms that recorded losses in 2024 returned to profit in 2025, reinforcing the stabilisation gains achieved during the year.

However, CPPE noted that despite the progress recorded on the macroeconomic front, fiscal performance at the federal level remained weak. Rising debt-service obligations continued to constrain fiscal space and undermine effective budget execution, while revenue underperformance persisted, largely due to sub-optimal outcomes in the oil sector.

The 2025 Federal Budget, the group observed, was anchored on ambitious assumptions, including an oil price benchmark of US$75 per barrel and crude oil production of 2.06 million barrels per day. Actual outcomes fell significantly short, with average oil prices around US$66 per barrel and production closer to 1.66 million barrels per day.

As a result, CPPE said the projected N41 trillion revenue target was missed by a wide margin, leading to weak implementation of capital expenditure.

In contrast, sub-national governments recorded relatively stronger fiscal outcomes, supported by improved liquidity, stronger internally generated revenue performance and better execution of capital projects. These gains translated into more visible delivery of infrastructure and social services in several states.

Looking ahead to 2026, CPPE expressed cautious optimism, projecting GDP growth of between 4.0 and 4.5 per cent. The organisation said moderating inflation is expected to strengthen domestic demand and create room for gradual monetary easing, potentially lowering interest rates and stimulating private-sector investment.

It added that the services sector—particularly telecommunications, financial services, construction, real estate and trade—would remain the primary engine of growth. Capital market prospects were also described as positive, supported by the potential listing of the Dangote Refinery, which CPPE said could deepen market liquidity and attract both domestic and foreign portfolio inflows.

Despite the positive outlook, CPPE warned that several downside risks could threaten the growth trajectory.

These include persistent security challenges, oil price and production volatility, high power and logistics costs, mounting debt-service obligations and external shocks arising from geopolitical tensions.

The think tank also cautioned that pre-election pressures and emerging resistance to tax reforms could undermine fiscal stability and revenue expectations in 2026.

It noted that debt service is estimated at over N15 trillion in the 2026 appropriation, representing about 50 per cent of projected revenue and continuing to constrain fiscal space.

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