By Onu Okorie

Centre for the Promotion of Private Enterprise CPPE has urged the Federal Government to make reducing production costs, improving productivity and strengthening the competitiveness of Nigerian businesses the central focus of its economic reforms in the second half of 2026.

In its half-year economic review, the CPPE said that while Nigeria had recorded its strongest macroeconomic fundamentals in several years, the gains had yet to translate into broad-based improvements in business performance, job creation and household welfare.

The economic policy think tank said priority should be given to improving electricity supply, transport infrastructure, logistics efficiency and port operations, while also strengthening security in farming communities and along transport corridors to support agricultural production and investment.

It also called for expanded access to affordable long-term financing for productive sectors, faster budget implementation, improved credibility of the budget process, enhanced infrastructure delivery and deeper domestic value addition across the economy.

According to the report, government revenue should increasingly come from efficiency-enhancing reforms rather than additional tax burdens, while maintaining policy consistency despite rising political activities ahead of the 2027 general elections.

The CPPE warned that electioneering should not distract policymakers from economic governance or slow the implementation of reforms, stressing that macroeconomic stability alone would not guarantee sustainable growth.

It noted that Nigeria entered the second half of 2026 with stronger exchange-rate stability, moderating inflation compared with the exceptionally high levels recorded in 2025, improved external reserves, higher crude oil production and resilient financial markets, all of which had strengthened investor confidence.

However, it observed that businesses continued to struggle with high production costs, inadequate electricity supply, logistics bottlenecks, poor transport infrastructure and elevated interest rates, which have constrained investment and competitiveness, particularly in manufacturing, agriculture and micro, small and medium-sized enterprises.

The report further stated that insecurity remained a major obstacle to agricultural production and supply chains, while delays in capital project implementation due to procurement challenges, funding constraints and debt-service obligations had limited the impact of government spending on economic growth.

Looking ahead, the CPPE expressed cautious optimism about the economy in the second half of 2026, projecting continued positive growth driven by financial services, telecommunications, construction, trade, oil refining and other service-sector activities, although growth is expected to remain below the country’s long-term potential.

It also projected that inflation would remain significantly lower than 2025 levels, supported by improved foreign exchange inflows, stronger external reserves and growing market confidence, while improved domestic refining capacity and higher crude oil production are expected to strengthen fiscal revenues, foreign exchange earnings and energy security.