Muda Yusuf, a renowned economist and chief executive officer of the Centre for Promotion of Private Enterprises (CPPE), has highlighted several downside risks to the Nigerian economy in the 2026 fiscal year, amidst a positive outlook.
Yusuf, in the 2026 economic outlook released by the CPPE, said that with reform momentum sustained, Nigeria is expected to transition more decisively from stabilisation to growth.
He noted positive prospects for the capital market, supported by the potential listing of Dangote Refinery, which he said could deepen market liquidity and attract domestic and foreign portfolio inflows.
Noting that GDP growth is projected between 4.0 and 4.5 per cent in 2026, supported by continued moderation in inflation and stronger non-oil sector performance, Yusuf said that moderating inflation should strengthen domestic demand and create room for gradual monetary easing, potentially lowering interest rates and stimulating private investment.
He said, “The year 2025 marked a significant turning point in Nigeria’s macroeconomic trajectory following the turbulence associated with the early phase of reforms. Exchange-rate stability emerged as the most visible achievement, with the naira largely trading within the N1,440-N1,500/$.
“Periodic marginal appreciation strengthened business confidence, eased imported inflation and restored predictability to pricing, contracting and investment planning.
“Despite the improving trajectory, several downside risks persist, including: insecurity, which continues to constrain agriculture, logistics and investment, oil price and production volatility, high power, energy and logistics costs, which continue to weigh on real-sector productivity.”
Other risk factors, according to Yusuf, include: debt and fiscal pressures, external headwinds, and fiscal and political uncertainties in the pre-election period.
Yusuf said that emerging resistance may undermine tax revenue expectations for 2026 as the government plans the implementation of the new tax laws.
“2025 laid a solid foundation of macroeconomic stability. The outlook for 2026 is reassuring, with expectations of stronger growth, easing inflation, improving investor confidence and a gradual shift toward more inclusive expansion.
“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,” he said.
Mixed Outcomes Despite macroeconomic stabilisation, federal fiscal performance remained weak. Debt service obligations continued to constrain fiscal space, undermining budget execution.
Yusuf further emphasised that if economic 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.
He said that services, especially telecommunications, finance, construction, real estate and trade, will remain the primary growth engine of the Nigerian economy.
