2027 election spending poses risk to naira, inflation stability — CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has warned that early spending linked to the 2027 general elections could destabilize the naira and completely reverse recent gains made in curbing inflation.

The policy think-tank noted that escalating political activities and electioneering liquidity ahead of the polls pose a major threat to Nigeria’s fragile macroeconomic stability.

In its 2026 half-year review and second-half outlook released on Sunday, the CPPE cautioned that campaign spending could flood the economy with excess liquidity, potentially triggering fresh inflationary pressures and heightened foreign exchange demand.

The center also raised alarms that growing political interests risk distracting the federal government from structural economic governance at a critical time.

While the agency acknowledged that improved external reserves and exchange rate stability point to some of Nigeria’s strongest macroeconomic fundamentals in years, it stressed that these statistical gains have failed to reflect in business performance or household well-being.

According to the report, manufacturing, agriculture, and small businesses are still suffocating under severe operational vulnerabilities caused by high interest rates, weak transport infrastructure, and lingering insecurity along major farming corridors.

The report noted that insecurity continues to undermine agricultural production, disrupt supply chains, and discourage investment across several critical sectors.

It also noted that procurement delays and funding constraints have slowed down the implementation of the federal capital budget.

“Election-related spending could inject additional liquidity into the economy, with possible implications for inflationary pressures, foreign exchange demand, and macroeconomic management. Policymakers must maintain an absolute focus on structural reforms rather than political calculations,” the statement read in part.

To prevent looming pre-election spending from completely erasing the economic stabilization recorded so far, the policy think-tank urged the government to protect its revenue framework by driving administrative efficiency instead of imposing additional tax burdens on struggling private enterprises.

The statement, signed by CPPE Chief Executive Officer Dr. Muda Yusuf, concluded that the true test of current economic management will not be measured by stable statistical charts, but by the extent to which structural interventions lower the cost of doing business and elevate the living standards of ordinary Nigerians.