2027 politics could distract Nigeria’s economic reforms, CPPE warns

THE Centre for the Promotion of Private Enterprise (CPPE) says Nigeria recorded significant improvements in macroeconomic stability in the first half of 2026 but warns that the gains have yet to translate into meaningful improvements in business productivity, job creation and household welfare.

It noted that the 2027 politics and elections could have a negative impact on economic reforms achieved so far in the West African nation.

In its ‘Nigeria’s Economy in 2026: Half-Year Review and Second-Half Outlook’ released on Sunday, the private sector advocacy group said stronger foreign exchange (FX) stability, moderating inflation, improved external reserves, higher crude oil production and resilient financial markets have reduced macroeconomic vulnerabilities and boosted investor confidence.

The report, signed by Dr. Muda Yusuf, chief executive officer of the CPPE, noted that while macroeconomic conditions have strengthened considerably, businesses continue to contend with high production costs, weak infrastructure and other structural constraints.

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According to the CPPE, high interest rates have continued to limit private-sector investment and access to credit, while elevated energy costs, unreliable electricity supply, poor transport infrastructure and logistics challenges have sustained a high-cost operating environment for manufacturers, farmers and micro, small and medium-sized enterprises (MSMEs).

The organisation also identified insecurity as a major obstacle to agricultural production and investment, saying disruptions to farming activities and supply chains continue to weigh on economic performance. It added that slow implementation of capital projects due to procurement delays, funding constraints and debt-service obligations has limited the impact of fiscal policy on growth.

Looking ahead to the second half of the year, the CPPE said it remains cautiously optimistic that economic growth will continue, supported by financial services, telecommunications, construction, trade, oil refining and other service-sector activities.

It projected that inflation would remain significantly lower than the levels recorded in 2025, although food supply disruptions, energy prices and developments in global commodity markets could still pose risks. The report also expects exchange-rate stability to be sustained by stronger FX inflows, healthier external reserves and improved market confidence.

The CPPE said financial markets are likely to remain resilient, supported by bank recapitalisation, stronger corporate earnings, improved regulatory oversight and sustained institutional participation. It added that higher domestic refining capacity and improved crude oil production should strengthen government revenues, foreign exchange earnings and energy security.

However, the organisation cautioned that increasing political and electioneering activities ahead of the 2027 general elections could pose risks to macroeconomic stability. It warned that election-related spending may increase liquidity in the economy, potentially fuelling inflationary pressures and raising demand for foreign exchange. It also expressed concern that heightened political activity could divert attention from economic governance and the implementation of critical reforms.

The CPPE urged the federal government to make competitiveness the next phase of its economic reform agenda by prioritising improved electricity supply, transport infrastructure, logistics efficiency and port operations.

It also called for stronger security in farming communities, expanded access to affordable long-term financing for productive sectors, faster budget implementation, improved infrastructure delivery and greater domestic value addition.

According to the report, government revenue should increasingly come from efficiency-enhancing reforms rather than higher tax burdens, while policy consistency should be maintained despite the build-up to the 2027 elections.

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“The more fundamental challenge is to ensure that these gains are reflected in stronger business competitiveness, higher private investment, faster job creation and improved living standards,” the report stated.

“Priority should be given to 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.”

The CPPE concluded that sustained reform momentum, stronger implementation capacity and policy consistency will be essential to translating Nigeria’s macroeconomic recovery into broad-based and inclusive economic growth.