Nigeria could enter a stronger and more sustainable growth phase in 2026 if economic reforms were sustained and security challenges addressed, the Centre for the Promotion of Private Enterprise (CPPE) said in its 2025 economic review on Sunday.
According to the review signed by its CEO, Muda Yusuf, the private sector think tank said 2025 marked a clear turning point in Nigeria’s macroeconomic trajectory after the instability that followed the early phase of reforms.
Exchange-rate stability was the most visible gain, with the naira trading largely within the N1,440–N1,500 per dollar range, easing pricing uncertainty for businesses and reducing imported inflation.
Inflation slowed sharply during the year, falling from 24.48% in January to approximately 14.45% by November 2025.
CPPE attributed the moderation to currency stability, easing logistics pressures and improved supply conditions, which helped reduce price volatility and led to outright price declines in some food items and imported consumer goods.
Business confidence improved alongside these developments. The NESG–Stanbic IBTC Business Confidence Index remained positive for most of 2025, reflecting improved investor sentiment and a gradual recovery in corporate profitability. Several firms that recorded losses in 2024 returned to profit in 2025, reinforcing signs of macroeconomic stabilisation.
Despite these gains, CPPE said fiscal performance at the federal level remained weak. High debt-service obligations continued to limit fiscal space, while oil revenue fell short of expectations.
The 2025 budget was based on oil production of 2.06 million barrels per day and a price of $75 per barrel, but actual outcomes were significantly lower, resulting in missed revenue targets and weak capital expenditure implementation.
In contrast, state governments recorded relatively stronger outcomes, supported by improved liquidity, better internally generated revenue performance and stronger execution of capital projects, leading to more visible delivery of infrastructure and social services in several states.
Sectoral performance showed a continued shift away from oil. By the third quarter of 2025, services accounted for about 53 per cent of GDP, compared with just 3.44 per cent for oil. The non-oil sector contributed more than 96 per cent of GDP, driven mainly by telecommunications, financial services, trade, construction and real estate.
Manufacturing growth remained weak, constrained by power shortages, high operating costs and limited access to finance, while agriculture recorded only a modest recovery amid persistent insecurity and low productivity.
Looking ahead, CPPE expressed cautious optimism about 2026, projecting GDP growth of between 4.0% and 4.5%, supported by easing inflation and stronger performance in the non-oil sector.
It said moderating inflation could support domestic demand and create room for gradual monetary easing, while services would remain the main driver of growth.
“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,” it said.
Summing up its assessment, CPPE said
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“Overall, 2025 laid a solid foundation of macroeconomic stability.” It added that “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.”
However, the think tank warned that risks remained, including insecurity, oil price volatility, heavy debt-service obligations, high energy and logistics costs, and potential fiscal pressures in the pre-election period.
