The Centre for the Promotion of Private Enterprise says the Nigerian economy entered the second half of 2026 with its strongest macroeconomic fundamentals in years and greater investor confidence than at the start of the year, but warned that election-related spending could stoke inflation and pressure the foreign exchange market.

In a statement titled on the half-year review and second-half outlook, Chief Executive Muda Yusuf said exchange rate stability, moderating inflation relative to the elevated levels of 2025, stronger reserves, improved oil output and resilient financial markets had reduced vulnerabilities and lifted confidence, describing it as an important policy achievement.

He said the centre remained cautiously optimistic, expecting positive output supported by financial services, telecommunications, construction, trade and oil refining, though growth was likely to stay below Nigeria’s long-term potential. Inflation, he added, should remain well below 2025 levels, with food supply disruptions and energy costs the main upside risks.

Yusuf cautioned that stabilisation had not yet translated into broad-based gains in productivity, competitiveness, employment and household welfare, with businesses still facing high production costs and structural bottlenecks. The defining challenge for the rest of the year, he said, was converting improved conditions into inclusive, investment-driven growth.

He said the next phase of reform should focus on lowering production costs and improving competitiveness, prioritising electricity, transport, logistics and port operations, security in farming communities, and access to affordable long-term finance. He also warned that intensifying political activity ahead of 2027 could inject liquidity into the economy and distract policymakers from reform.