The Centre for the Promotion of Private Enterprise (CPPE) has issued a stark warning regarding Nigeria’s macroeconomic stability, highlighting escalating threats from global energy shocks, political pressures, and fiscal constraints. This outlook was detailed in the think tank’s economic forecast for the second quarter of 2026.
While the Nigerian economy has shown signs of recovery, the CPPE cautions that the sustainability of these gains is uncertain due to building downside risks. The report specifically points to the fragility of the disinflation trend, noting its vulnerability to reversal, especially with the ongoing Middle East conflict driving up global oil prices.
Higher crude prices are anticipated to translate quickly into increased domestic fuel costs, subsequently raising logistics, production, and operating expenses across various sectors of the economy. This could lead to a significant erosion of real incomes and exacerbate the cost-of-living crisis for Nigerian households.
Although elevated oil prices may boost government revenue, they simultaneously pose immediate inflationary risks. The CPPE also noted that while exchange rate stability might persist in the short term, supported by improved reserves and foreign exchange liquidity, volatility risks remain if geopolitical tensions escalate.
Regarding economic growth, the CPPE projects continued expansion but at a decelerated pace. This slowdown is attributed to weak consumer demand and high energy costs. The think tank has flagged stagflation, characterized by a combination of high inflation and weak economic growth, as a significant emerging risk for the second quarter of 2026.
The report further suggests that the Central Bank of Nigeria (CBN) is likely to adopt a cautious policy stance. It warns that additional monetary tightening might have a limited impact on curbing inflation while simultaneously constraining investment and credit growth.
The current economic outlook is shaped by a surge in global oil prices, with Brent crude rising by 6.3% to $107.49 per barrel and West Texas Intermediate climbing 5.3% to $
