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Expert chart path for economy in Q2, as Q1 ends on a high

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Economic and financial experts at the weekend submitted that the second quarter economic outlook for the country’s economy remains cautiously positive but increasingly uncertain, as it will be shaped by geopolitical developments, political cycle dynamics, and fiscal execution risks.

 

To this end, they admonish that policy priorities should focus on consolidating macroeconomic stability, addressing structural bottlenecks, and implementing targeted measures to protect vulnerable populations.
They drew their position from the performance of the economy on the first quarter (Q1) which they claim represents a significant inflection point for the Nigerian economy, marked by notable gains in macroeconomic stability.

 

They however noted that these gains are tempered by persistent structural challenges and mounting welfare pressures. For instance, the ongoing Middle East conflict, they argued, presents a credible risk of stagflation, particularly if the crisis is prolonged or intensifies. Besides, the rising global energy prices, it is believed, are likely to amplify inflationary pressures while simultaneously constraining output growth through higher production and logistics costs. Therefore, for businesses and investors, success in this environment will depend on resilience, operational efficiency, and strategic positioning.

 

This dual impact, elevated inflation alongside weakened growth, analysts warns, poses a significant macroeconomic risk, with adverse implications for business profitability, investment decisions, and overall economic stability.

The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, in a policy brief obtained by The Trust News, noted that the economy in the first quarter, reflected a blend of improving macroeconomic stability and persistent structural constraints. He maintained that evidence of a more stable macroeconomic environment is increasingly evident, underpinned by the cumulative gains from foreign exchange reforms, a sustained period of monetary tightening, and the gradual normalisation of key economic indicators.

 

However, Yusuf said these improvements continue to coexist with significant headwinds. “The cost-of-living crisis remains pronounced, energy costs are still elevated, concerns around insecurity persist, and deep-seated structural rigidities continue to constrain productivity and investment,” the CPPE boss said.

 

According to him, as the economy transitions into the second quarter, the outlook remains cautiously optimistic but not without considerable risks as the trajectory of macroeconomic stability is vulnerable to external shocks, particularly the evolving geopolitical tensions, while the intensifying political cycle ahead of the 2027 elections could pose risks to policy focus and reform momentum. Additionally, fiscal execution constraints remain a critical concern, with implications for budget implementation, infrastructure delivery, and overall economic performance.

 

Yusuf, an economist, looking into his crystal ball, maintained that the outlook for Q2 2026 reflects a combination of sustained macroeconomic momentum and rising downside risks.

For instance, he said the current disinflation trajectory remains fragile and susceptible to reversal. He argued that the ongoing Middle East conflict has precipitated a sharp escalation in global crude oil prices, with benchmarks crossing the $100 per barrel threshold in recent weeks-developments with significant inflationary implications.

According to him, the development in the Middle East situation presents a classic dual-edged dynamic for the country. Yusuf explained that on the upside, elevated crude oil prices are expected to bolster export earnings, strengthen foreign exchange inflows, and improve government revenue. However, he warned of the downside risks which are immediate and far-reaching.

 

“Higher crude prices transmit quickly into domestic fuel costs, with consequential increases in logistics, production, and operating expenses across the economy. This 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,” he said.
Although the economist pointed at the exchange rate which he said is expected to remain relatively stable in Q2, as it would be supported by improved reserves and forex liquidity, he nonetheless warns of persistent risks of volatility, particularly in the event of prolonged geopolitical tensions or shifts in investor sentiment.

 

“Economic growth is expected to remain positive in the near term, but the momentum is likely to moderate amid a confluence of downside risks. 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.

 

“Additionally, the risk of a stagflationary environment is becoming more pronounced, as cost pressures persist alongside fragile growth dynamics. Compounding these challenges are potential policy distractions associated with intensifying pre-election political activities ahead of the 2027 general elections, which could dampen reform momentum and weaken macroeconomic management,” Yusuf said.

Still, the CPPE helmsman maintained that the scope for further monetary easing in the near term appears constrained by renewed inflationary pressures, particularly those linked to rising global energy prices. In this context, he argued, monetary policy is expected to remain cautious and strongly data-driven, with limited headroom for aggressive rate cuts.

 

“There is, however, a risk that the Central Bank of Nigeria (CBN) may be inclined toward further tightening in response to prevailing geopolitical and inflationary pressures. Such a stance would be counterproductive, given the fragility of current growth dynamics.
“Notably, the present inflationary episode is largely cost-push in nature—driven by energy prices, exchange rate pass-through, and structural inefficiencies—rather than excess aggregate demand. Consequently, 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,” Yusuf warned.

 

He warned of a key emerging risk which centers around the increasing tempo of political activities ahead of the 2027 general elections. With political realignments, defections, and early campaign positioning already intensifying, he argued, it raises concerns about policy distraction, as economic management may increasingly compete with electoral considerations. This, he opines, may lead to a growing risk of deceleration in reform momentum, as politically sensitive but necessary reforms become more difficult to sustain in a pre-election environment.

 

Yet, the CPPE, and economic and think-tank group, noted that the 2026 budget, estimated at about ₦68 trillion, presents both opportunities and risks.
It noted that while the scale of the budget has the potential to stimulate economic activity, its effectiveness will depend largely on implementation quality. The CPPE expressed key concerns to include weak revenue performance; delays in capital releases; limited project execution capacity and increasing political influence on expenditure priorities

 

“As political pressures intensify, there is a risk of weakening fiscal discipline, with greater emphasis on recurrent and politically expedient spending,” the CPPE warned.
For businesses and investors, therefore, the current environment calls for a strategic shift from expansion-driven models to resilience, efficiency, and risk management.

Yusuf urged businesses to embrace cost containment as a top priority, particularly through energy efficiency and logistics optimisation.

“There is also a compelling case for investment in alternative energy solutions, including solar and gas-powered systems, to reduce dependence on costly diesel and petrol. Foreign exchange risk management is critical. Firms should deepen local sourcing strategies, promote backward integration, and carefully manage currency exposure.
“Liquidity management remains essential. Businesses should maintain strong cash buffers and avoid excessive leverage in a still high-interest-rate environment,” he said.

Yusuf advised investors to adopt a selective approach, focusing on sectors with strong and inelastic demand; pricing power; export potential or forex earnings capacity; policy support and structural growth prospects and close monitoring of the political environment given the likelihood of policy shifts as the election cycle intensifies,” he said.

According to the CPPE, the most notable development in Q1 2026 was the consolidation of macroeconomic stability. He noted that inflation continued on a downward trajectory, as headline inflation, which exceeded 24 per cent in early 2025, moderated to 15.15 per cent in December 2025 and further eased to approximately 15.06 per cent by February 2026. This, he said, is a reflection of the combined effects of tighter monetary conditions, improved exchange rate stability and some easing in supply-side pressures.

“Exchange rate conditions also improved significantly. The naira, which experienced substantial volatility during the reform transition period, stabilised within a relatively narrow band of about ₦1,340 – ₦1,430 per dollar in the official market during Q1 2026. This stability has helped to moderate imported inflation and restore a measure of business confidence.

“External reserves strengthened considerably, rising above $50 billion in early 2026. This improvement reflects stronger oil earnings, enhanced foreign exchange liquidity, and improved market confidence, thereby strengthening the capacity of monetary authorities to manage exchange rate volatility.

“Growth momentum remained positive. Real GDP growth stood at 4.07% year-on-year in Q4 2025, with full-year growth at 3.87 per cent, supported by recovery in the oil sector and sustained expansion in the non-oil economy. Business activity indicators also remained positive, with Purchasing Managers’ Index (PMI) readings consistently above the 50-point expansion threshold.

“Monetary policy has begun to reflect these improvements. In February 2026, the Monetary Policy Committee reduced the policy rate by 50 basis points to 26.5 per cent, signaling the start of a cautious easing cycle.
“Overall, these developments point to a transition towards relative macroeconomic stability—an essential foundation for restoring investor confidence and improving economic growth outlook,” he explained.

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Economy

Dangote: Fed. govt.’s economic reforms driving Nigeria’s economic recovery, restoring investors’ confidence

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· Says sustained reforms, policies will make Nigeria Africa’s most attractive investment destinations

· Ties Refinery’s progress to govt.’s supportive investment, domestic industrialisation policies

By Oluwayanmife Lucas

President and Chief Executive, Dangote Industries Limited (DIL), Aliko Dangote, has commended the Federal Government for implementing bold and transformative economic reforms that are repositioning Nigeria for sustainable growth, strengthening investor confidence, and accelerating the country’s economic recovery

Dangote hailed the ongoing fiscal, monetary, and regulatory reforms of the government, insisting that it has contributed significantly to improving macroeconomic stability, enhancing productivity across key sectors, increasing Nigeria’s attractiveness as an investment destination, and fostering a more resilient business environment. He noted that the positive outcomes emerging from the reform agenda underscore the importance of consistent, market-driven policies in advancing national development and economic prosperity.

“The economic reforms being implemented by the Federal Government are beginning to yield tangible results. We are witnessing improved economic activity, stronger investor confidence, increased industrial productivity, and a more resilient business environment. These measures are laying a solid foundation for sustainable economic growth and long-term prosperity for Nigeria,” Dangote stated.

 

According to the DIL boss, the reforms have created a more enabling operating environment for businesses, particularly large-scale manufacturing and industrial enterprises that are critical to economic diversification, job creation, foreign exchange generation, and national competitiveness. He added that government initiatives aimed at improving efficiency, promoting investment, enhancing transparency, and supporting domestic production are providing a solid framework for industrial expansion.

“We commend the Federal Government for its courage and determination in implementing reforms that are essential for economic transformation. While every reform process comes with initial challenges, the benefits are increasingly evident in stronger economic indicators, improved business confidence, and renewed investor interest in Nigeria,” he said.

Dangote further observed that the government’s favourable policy environment has supported the continued growth and efficient operation of the Dangote Petroleum Refinery and Petrochemicals complex, Africa’s largest integrated refining and petrochemical facility. He noted that policy measures designed to strengthen local refining capacity, reduce import dependence, improve energy security, and encourage value addition have contributed meaningfully to the refinery’s success and Nigeria’s broader economic development objectives.

“The progress being recorded at the Dangote Petroleum Refinery and Petrochemicals complex is closely linked to a policy environment that encourages investment, supports domestic industrialisation, and promotes self-sufficiency. These reforms are helping Nigerian businesses to plan with greater certainty, invest with confidence, and compete effectively on the global stage,” he added.

He stated that the refinery’s increasing production capacity and expanding export footprint are contributing significantly to Nigeria’s economic resurgence by generating foreign exchange earnings, creating employment opportunities, strengthening local supply chains, and positioning the country as a leading energy and manufacturing hub.

Reaffirming the Group’s commitment to supporting the Federal Government’s economic agenda, Dangote assured that the DIL would continue to invest in strategic sectors, drive innovation, promote industrial development, and create sustainable employment opportunities.

“Our vision has always been to support Nigeria’s economic development through transformative investments. Today, we are witnessing how the combination of private-sector commitment and decisive government policies can unlock unprecedented opportunities for national growth. The refinery, petrochemical operations, fertiliser production, and our other industrial investments are helping to build a more self-reliant, competitive, and prosperous economy,” he said.

He expressed confidence that sustained reforms, policy consistency, and stronger collaboration between the public and private sectors would further stimulate economic growth, attract increased foreign direct investment, and reinforce Nigeria’s position as one of Africa’s most attractive investment destinations.

“Nigeria is on the path to becoming one of the world’s leading industrial and economic powers. With continued policy consistency, robust private-sector participation, and investment-led growth, the future of our economy is exceptionally bright,” Dangote concluded

 

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Economy

Nigeria’s external reserves hit 18-year high at $53.99b

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By Oluwayanmife Lucas

Nigeria’s external reserves have reached an 18-year high of $53.99 billiion on September 2. The reserves position puts the naira on course for its best year since 2018 ahead of FTSE Russell reinclusion on September 21.

According to data from the Central Bank of Nigeria (CBN), external reserves were at $53.1 on August 24. The current reserves position is far higher that CBN’s projected $51.04 billion year-end target, and will cover over 12 months import for the economy.

Nigeria’s external reserves, which provide the CBN with the capacity to support the local currency and meet external obligations, have continued to rise steadily. Further analysis showed that the liquid portion of the external reserves stood at $52.5 billion.

Brent crude yesterday traded around $95.5 per barrel—above Nigeria’s 2026 federal budget benchmark of $64.85—the price rebound would largely bolster the country’s fiscal revenues.

As an oil exporter, Nigeria continues to earn more petrodollars and to support naira stability ans bolster external reserves.

In its economic projections for 2026, the CBN targeted stronger oil earnings, foreign exchange market reforms and improved external capital inflows to achieve year-end reserves target.

Analysts said the current reserves position reinforces the steady growth in Nigeria’s external buffers.

The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, earlier hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves.

Yusuf said, ‘’Well, the outlook for me is positive because I don’t see anything derailing these forex reforms, fuel subsidy etc. It is these reforms that have brought about stability”.

CBN data sfurther showed that Nigeria’s external reserves maintained a steady upward surge in recent months.

The reserves started June at $49.80 billion and crossed the $50 billion mark by June 5, reaching $50.12 billion.

On June 15, reserves had increased further to $50.81 billion before rising to current position. The reserves stood at $51.9 billion on July 31, and contrinued.

The sustained increase reflects stronger foreign exchange inflows and improved liquidity conditions in the country’s external sector.

The CBN Governor Olayemi Cardoso, said: “This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.”

The CBN’s decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, Cardoso said.

The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, but he believed it was the right thing to do, and gave investors his word.

He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.”

 

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‘Good governance critical to Nigeria’s $1tr economy ambition’

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By Olamide Akintunde

 

Experts in corporate governance, finance and public policy have said Nigeria must institutionalise good governance, sustain economic reforms and strengthen collaboration between the public and private sectors to accelerate economic growth and realise its ambition of becoming a $1 trillion economy.

 

The call came at the 2026 National Corporate Governance Summit themed “Implementing Good Governance for Economic Acceleration: Consolidating Public and Private Sector Partnership,” organised by the Institute of Directors (IoD) Centre for Corporate Governance, the Financial Reporting Council of Nigeria (FRC), the Ministry of Finance Incorporated (MOFI) and the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN).

Speaking on the theme, the Special Adviser to the President on Economic Affairs, Dr. Tope Fasua, who represented the Vice President, Kashim Shettima, said President Bola Tinubu’s administration remained committed to implementing reforms capable of building a resilient and competitive economy.

He said the government’s economic reforms including foreign exchange reforms, tax reforms and subsidy removal must be complemented by strong corporate governance in both public institutions and private enterprises.

“The public sector can create the enabling environment through reforms, but it is the private sector that translates those policies into investments, jobs and wealth creation. Both sectors must operate with integrity, accountability and transparency,” he said.

Fasua emphasised that governance should not be treated as a mere compliance exercise but as the foundation upon which investor confidence and sustainable economic development are built.
Speaking on the sidelines of the summit, he explained that the Federal Government’s reforms were designed to create long term economic transformation rather than deliver short term political gains, while calling for greater support for domestic investment and industrialisation.

Delivering the keynote address, the Chairman of Nigerian Breweries Plc, Mrs. Juliet Anammah, described the summit’s theme as timely, saying good governance must move beyond compliance and accountability to become a strategic tool for driving Nigeria’s economic rebirth. She maintained that stronger partnerships between government and the private sector would be critical to achieving sustainable economic acceleration and improving the quality of life of Nigerians.

 

According to her, the country’s immediate objective should be to move from a lower-middle-income economy to an upper-middle-income economy through sustained industrialisation, innovation and long-term policy implementation.

She acknowledged that the Federal Government had undertaken bold reforms, including fuel subsidy removal, foreign exchange unification and bank recapitalisation, saying the difficult decisions had helped stabilise the economy.

While noting that macroeconomic stability was encouraging, Anammah said it was not the final destination.
“Stabilisation is not the end goal. The destination is economic rebirth that improves household incomes, creates quality careers, expands access to healthcare and education and delivers reliable infrastructure,” she said.

Drawing lessons from countries such as Vietnam and Morocco, she argued that Nigeria must embrace industrialisation by producing more sophisticated and value-added products instead of relying on primary commodities.

She noted that sectors such as petrochemicals, agro-processing, automotive, renewable energy and manufacturing already possess enormous growth potential but require consistent industrial policies supported by sound governance to unlock higher levels of economic complexity.

According to her, policy inconsistency remains one of Nigeria’s greatest development challenges, urging governments at all levels to sustain industrial policies beyond political administrations.
She also advocated stronger competition among states, independent evaluation of industrial policies and closer collaboration between government and the private sector to deepen investment and accelerate economic growth.
She concluded that achieving meaningful economic acceleration would require strong corporate governance, sustained industrial policies and close collaboration between government and the private sector, noting that only through such coordinated efforts can Nigeria transition from an economy driven by informal livelihoods to one characterised by productive industries, quality careers and rising prosperity for its citizens.

 

Earlier, Chairman of the Board of Governors of the IoD Centre for Corporate Governance, Dr. Uche Eke, said the summit deliberately shifted the conversation from governance principles to implementation, stressing that sustainable economic growth would only be achieved when sound governance becomes embedded across both public institutions and private enterprises.

He explained that Nigeria had spent years identifying governance challenges and developing frameworks, stressing that the time had come for practical execution.
“We have stayed too long articulating the issues. The focus now is implementation. We must embed sound corporate governance practices in both public institutions and private organisations to guarantee sustainability beyond current leadership,” he said.

Eke noted that the summit sought to build national consensus among regulators, government institutions and the private sector on practical governance reforms capable of improving transparency, accountability and economic competitiveness.

He stressed that merit, competence and diversity should determine appointments into leadership positions rather than nepotism or political considerations.
“If Nigeria is serious about building a one trillion dollar economy, we must consistently place the right people in leadership positions, promote diversity of skills and hold leaders accountable for results,” he said.

Also speaking, Managing Director and Chief Executive Officer of MOFI, Dr. Armstrong Takang, said government alone cannot build the economy Nigeria desires, stressing that strong corporate governance is the foundation for effective public-private partnerships, investor confidence and long-term economic development.

He argued that contrary to the belief that government should not participate in business, successful economies such as China had demonstrated that well-governed state-owned enterprises could become major drivers of investment, industrialisation and economic growth.

Takang said MOFI’s recent experience showed that institutions with strong corporate governance frameworks consistently attracted greater investment and delivered better value creation.
According to him, governance reforms introduced across MOFI’s portfolio companies had significantly improved investor confidence and strengthened the performance of government-owned assets.

He cited initiatives including the MOFI Real Estate Investment Fund and the proposed Metro Rail Infrastructure Programme as examples of projects attracting institutional investment because of strong governance structures.
“Government alone cannot build the economy we desire. We need partnerships with the private sector and institutional investors, and corporate governance remains the common denominator that inspires confidence and mobilises capital,” he said.

Stakeholders and participants at the summit agreed that sustaining reforms, strengthening institutions and entrenching transparency across both public and private organisations would be critical to accelerating economic growth, boosting investor confidence and positioning Nigeria to achieve its long-term development ambitions.

 

 

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