Nigeria’s leading organized private sector (OPS) advocacy group, the Centre for the Promotion of Private Enterprise (CPPE) has expressed its concern that the nation’s economic growth will remain positive in the second quarter this year, but that the positive trend may slow due to mounting downside risks in the domestic and global macroeconomic landscapes in the remaining quarters of the year.
The Centre, in its ‘Q1 2026 Economic Review and Q2 Outlook Brief’ released on Sunday and signed by its Chief Executive Officer, Dr Muda Yusuf, specifically projected that Nigeria’s economic growth was expected to remain positive in the near term, but the momentum is likely to moderate amid a confluence of downside risks, as elevated energy costs continue to exert significant pressure on production and operating expenses, while weak consumer demand, driven by eroded purchasing power, remains a binding constraint on output expansion.
Noting that the current rising global crude oil prices triggered by the ongoing Middle East conflict poses a major threat to Nigeria’s fragile disinflation process, the Centre anticipated that while higher oil prices could boost export earnings and government revenue, the impact on the economy would be adverse.
According to the OPS advocacy group, the cost pass-through effect poses a significant threat to the fragile disinflation process, potentially reversing recent gains in price stability, weakening real incomes, and further exacerbating the cost-of-living pressures facing households and businesses.
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In its forecast on Naira exchange rate, the CPPE projected some relative stability in the local currency’s exchange rate in Q2 based on the improving foreign reserves and liquidity, but warned that volatility risks still subsisted.
This is even as cautioned the fiscal authorities of a growing risk of stagflation, as persistent cost pressures combine with fragile growth conditions, adding that rising political activities ahead of the 2027 general elections could also slow the ongoing reform momentum by distracting the government from focusing on economic management issues
On monetary policy concerns, the CPPE noted that the current inflationary trend was primarily being driven by structural and cost-related factors rather than excess demand.
The Centre clarified: “Additional monetary tightening would have limited effectiveness in addressing the underlying drivers of inflation, while potentially exacerbating constraints on investment, credit expansion, and overall economic growth.
“As political pressures intensify, there is a risk of weakening fiscal discipline, with greater emphasis on recurrent and politically expedient spending”, it added
To adapt to the inclement fiscal environment and sustain their operations, the OPS group advised entrepreneurs and other business owners to shift focus towards resilience and efficiency, including cost reduction, adoption of alternative energy sources, and strengthening foreign exchange risk management strategies.
While charging policymakers, particularly the governments, to take urgent steps to safeguard economic stability and protect vulnerable groups, the CPPE advocated: “Policy priorities should therefore focus on consolidating macroeconomic stability, addressing structural bottlenecks, and implementing targeted measures to protect vulnerable populations.”
In its concluding advisory, the Centre maintained that while macroeconomic stability gains recorded in the first quarter of 2026 were notable, the outlook for the second quarter remained cautiously positive but increasingly uncertain due to geopolitical tensions, fiscal risks, and domestic political dynamics.
