With reform momentum sustained, Nigeria is expected to transition more decisively from stabilisation to growth, the Centre for the Promotion of Private Enterprises (CPPPE), has said.
The CPPE in its review of the Nigerian economy in 2025 and economic outlook for 2026, titled “2025: A Year of Macroeconomic Stabilisation,” aduced that the country’s economy in the coming year would be one of a “cautious optimism.”
GDP growth is projected between 4.0 and 4.5%, supported by continued moderation in inflation and stronger non-oil sector performance.
The centre noted that moderating inflation should strengthen domestic demand and create room for gradual monetary easing, potentially lowering interest rates and stimulating private investment.
It added that services such as telecommunications, finance, construction, real estate and trade, will remain the primary growth engine.
“Capital-market prospects are positive, supported by the potential listing of Dangote Refinery, which could deepen market liquidity and attract domestic and foreign portfolio inflows. Policy credibility remains strong, reinforcing investor confidence and capital inflows,” CPPE stated in the review signed by its CEO, Dr Muda Yusuf.
However, despite the improving trajectory, CPPE observed that several downside risks persist which include security challenges; oil price and production volatility; structural constraints -high energy and logistics costs; and debt pressures, amongst others.
Highllighting the challenges against 2026, the report stated in part: “Debt and fiscal pressures: Debt service—estimated at over ₦15 trillion in the 2026 appropriation (about 50% of projected revenue)—continues to constrain fiscal space.
“External headwinds: Geopolitical tensions could affect trade flows, commodity prices and capital movements.
“Pre-election pressures: Fiscal and political uncertainties in the pre-election year could heighten risks.
“Pushback on tax reforms: Emerging resistance may undermine tax revenue expectations for 2026.”
Overall, the CPPPE nooted that 2025 laid a solid foundation of macroeconomic stability, maintaining that the outlook for 2026 is reassuring, with expectations of stronger growth, easing inflation, improving investor confidence and a gradual shift toward more inclusive expansion.
“If reform momentum is sustained and security challenges are effectively addressed, 2026 could mark the beginning of a more robust growth phase with tangible improvements in living standards,” the CPPE said.
The centre believes that the year 2025 marked a significant turning point in Nigeria’s macroeconomic trajectory following the turbulence associated with the early phase of reforms, noting that exchange-rate stability emerged as the most visible achievement, with the naira largely trading within the ₦1,440–₦1,500/$ band.
CPPE stated: “Periodic marginal appreciation strengthened business confidence, eased imported inflation and restored predictability to pricing, contracting and investment planning.
“Inflation decelerated sharply from 24.48% in January to about 14.45% by November 2025. The slowdown was supported by currency stability, easing logistics pressures and improving supply conditions. Several food items and imported consumer goods recorded outright price declines, contributing to improved consumer sentiment and reduced price volatility.
“Business confidence strengthened materially. The NESG–Stanbic IBTC Business Confidence Index remained positive for most of the year, reflecting improved investor perception and a gradual recovery in corporate profitability. Many firms that posted losses in 2024 returned to profit in 2025, underscoring the stabilisation gains.”
However, CPPE said despite macroeconomic stabilisation, federal fiscal performance remained weak.
“Debt-service obligations continued to constrain fiscal space, undermining budget execution. Revenue underperformance persisted, largely reflecting sub-optimal oil sector performance,” it noted.
“The 2025 Federal Budget was anchored on optimistic assumptions—$75 per barrel oil price and production of 2.06 million barrels per day (mbpd). Actual outcomes fell materially short, with average oil prices around $66 per barrel and production closer to 1.66 mbpd. Consequently, the projected ₦41 trillion revenue target was significantly missed, leading to weak capital expenditure implementation.
“In contrast, sub-national governments recorded relatively stronger fiscal outcomes. Improved liquidity, stronger internally generated revenue (IGR) performance and better capital project execution enabled more tangible delivery of infrastructure and social services across several states.”
Commenting on sectoral peformance, the centre noted that the services sector remained the primary driver of growth.
It stated: “By Q3 2025, services accounted for about 53% of GDP, compared with 3.44% for oil. The non-oil sector contributed 96.56% of GDP and grew by 3.91%, highlighting Nigeria’s gradual structural shift away from oil dependence.
“Services grew by 4.14% driven by telecommunications, financial services, trade, construction and real estate. Manufacturing remained fragile, growing by just 1.25% and contributing 7.62% to GDP, reflecting persistent constraints—power deficits, logistics costs, unfair competition from imports, weak access to finance and high operating costs.
“Agriculture recorded a marginal recovery, growing by 3.79% and contributing 31.21% to GDP. However, insecurity, low productivity and post-harvest losses continued to limit its contribution to exports and fiscal revenues.”
