The Centre for the Promotion of Private Enterprise (CPPE) has projected that Nigeria’s economy will transition from a phase of stabilization to a trajectory of tangible growth in 2026, with Gross Domestic Product (GDP) expected to expand between 4.0 and 4.5 per cent.
In its 2026 Economic Outlook released on Sunday, December 28, the think-tank expressed cautious optimism about the fiscal year, noting that sustained reform momentum would be critical to achieving these targets.
The report, signed by the CPPE Chief Executive Officer, Dr. Muda Yusuf, highlighted that the anticipated growth would be driven largely by the non-oil sector, with the services industry particularly telecommunications, finance, trade, construction, and real estate remaining the primary engine of economic expansion.
A major highlight of the outlook is the expectation of a more favorable monetary policy environment.
The CPPE forecasts that the continued moderation in inflation, which slowed significantly in late 2025, will strengthen domestic demand and create room for gradual monetary easing. This shift is expected to potentially lower interest rates, thereby stimulating private investment which has been stifled by high borrowing costs.
The capital market is also poised for a positive run, buoyed by the potential listing of the Dangote Refinery.
The CPPE noted that such a listing would not only deepen market liquidity but also attract significant domestic and foreign portfolio inflows, further reinforcing investor confidence.
Despite the positive trajectory, the report identified significant downside risks that could threaten fiscal performance.
Chief among these is the burden of debt service, which is estimated at over N15 trillion in the 2026 appropriation consuming about 50 per cent of projected revenue.
The CPPE warned that this continues to severely constrain fiscal space. Additionally, the economy remains exposed to oil price and production volatility, security challenges hindering agriculture and logistics, and structural constraints such as high energy and logistics costs.
The report also cautioned about the potential impact of the political environment, noting that fiscal and political uncertainties characteristic of a pre-election year could heighten risks in 2026.
It also highlighted that emerging resistance to tax reforms was flagged as a factor that could undermine revenue expectations.
Reflecting on the preceding year, the CPPE described 2025 as a turning point for macroeconomic stabilization, citing exchange rate stability within the N1,440–N1,500/$ band and a sharp deceleration of inflation from 24.48 per cent in January to 14.45 per cent by November.
Dr. Yusuf concluded that if the current reform momentum is sustained and security challenges are effectively managed, 2026 could mark the beginning of a robust growth phase with tangible improvements in the living standards of Nigerians.