The Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has noted that macroeconomic stabilisation has not yet translated into significant, broad-based improvements in productivity, competitiveness, employment and household welfare.
In a Half-Year Economic Review and Second-Half Outlook, titled, “Nigeria’s Economy in 2026: Half-Year Review and Second-Half Outlook – Macroeconomic Recovery, Structural Reforms and the Competitiveness Imperative,” he noted that businesses continue to grapple with elevated production costs and persistent structural bottlenecks.
He however added that Nigeria entered the second half of 2026 with significantly stronger macroeconomic fundamentals than at the beginning of the year, citing FX stability, moderating inflation relative to the exceptionally elevated levels of 2025, stronger external reserves, improved crude oil production and resilient financial markets as key indicators of progress.
These he said, have strengthened investor confidence.According to him, the defining policy challenge for the remainder of 2026 is to convert improved macroeconomic conditions into inclusive, investment-driven and productivity-enhancing growth.
He observed that the first half of 2026 reflected continued progress in macroeconomic stabilisation.
Economic growth remained positive, FX 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. Financial markets also remained resilient, supported by improving investor confidence and policy credibility.
Despite these encouraging developments, he said, the real economy remained under considerable pressure. High interest rates continued to constrain 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.
Manufacturing, agriculture and micro, small and medium-sized enterprises (MSMEs) continued to face significant competitiveness challenges despite improvements in macroeconomic stability.
He further noted that insecurity continued to undermine agricultural production, disrupt supply chains and discourage investment across several sectors. In addition, capital expenditure implementation remained below expectations due to procurement delays, funding constraints and debt-service pressures, thereby limiting the growth impact of fiscal policy.
“Overall, the first half of 2026 was characterised by stronger macroeconomic stability but only modest improvements in real-sector performance and household welfare, underscoring the need for deeper structural reforms,” he said.
Looking ahead to the second half of 2026, he expressed cautious optimism, projecting that economic output will remain positive, supported by financial services, telecommunications, construction, trade, oil refining and other service-sector activities.
Although growth is expected to remain below Nigeria’s long-term potential, the economy appears firmly on a gradual recovery path.
Inflation is expected to remain substantially below 2025 levels, although food supply disruptions, energy costs and developments in global commodity markets remain important upside risks. FX stability is also expected to be sustained through stronger foreign exchange inflows, healthier reserves and improved market confidence.
Financial markets are projected to remain broadly resilient, supported by banking-sector recapitalisation, stronger corporate earnings, improved regulatory oversight and sustained institutional participation. Improved domestic refining capacity and stronger crude oil production are also expected to support fiscal revenues, foreign exchange earnings and energy security.
He however, warned of an important downside risk arising from the increasing intensity of political and electioneering activities ahead of the 2027 general elections.
“Election-related spending could inject additional liquidity into the economy, with possible implications for inflationary pressures, foreign exchange demand and overall macroeconomic management.”
He also cautioned that increasing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policy initiatives.
He stressed that while the improvement in macroeconomic indicators provides an important foundation for sustainable growth, it is not sufficient on its own. The next phase of economic reforms, he said, should focus on lowering production costs, improving productivity and strengthening the competitiveness of enterprises.
He identified key policy priorities to include 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.
He further advised that government revenue should increasingly be driven by efficiency-enhancing reforms rather than additional tax burdens.
He also called for policy consistency to be maintained despite increasing political activity ahead of the 2027 elections, while urging government to minimise governance distractions and ensure that electioneering does not weaken the pace of reforms, budget implementation or the quality of economic management.
He added that the quality of economic management during the remainder of 2026 will 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.
“Sustained reform momentum, stronger implementation capacity and continued policy consistency will be critical to translating macroeconomic recovery into durable, broad-based and inclusive economic transformation,” he concluded.