Nigeria's CPPE: Reversing Economic Reforms Would Hit FX Stability and Investor Confidence

CPPE's Warning: Reform Reversal Would Undo FX Stability and Investor Confidence

Nigeria's leading private-sector advocacy body, the Centre for the Promotion of Private Enterprise, has urged the Federal Government to maintain its economic reform programme, warning that reversing course would erode investor confidence, weaken fiscal stability and destabilise the foreign-exchange market.

In a scorecard assessment released by Chief Executive Muda Yusuf, the group said the reforms have already produced measurable macroeconomic results: stronger government revenues, a more stable naira market, improved external reserves, a larger trade surplus and recovering investor confidence. Real GDP growth strengthened to 3.89 percent in the first quarter of 2026, up from 3.13 percent a year earlier.

However, CPPE cautioned that this macroeconomic stability has not yet translated into lower household costs or reduced operating expenses for businesses. Purchasing power remains squeezed, while firms continue to face high energy, financing, logistics and regulatory costs. The group argues that stability is only a means to an end, and that the next phase must move decisively into productivity, jobs and living standards.

CPPE warned that abandoning the reforms would reintroduce the very distortions they were designed to correct and could trigger significant economic dislocation. Instead of reversal, it called for evidence-based recalibration of the reform instruments as implementation experience and household impact become clearer.

Nigeria's Reform Scorecard: Real Gains, Unfinished Household Recovery

What the Scorecard Actually Shows

The headline numbers support continuity: stronger revenues, improved reserves, a wider trade surplus and GDP growth accelerating from 3.13 percent to 3.89 percent year-on-year. But those are aggregate indicators. The assessment's central argument is that Nigeria has paid the stabilisation cost without yet receiving the productivity dividend.

Where the Gains Have Not Reached Households and Firms

CPPE's position is that macroeconomic stability is not an endpoint. The group points to continued pressure on purchasing power and to business burdens in energy, financing, logistics and regulation. Even as manufacturing and agriculture grew by 3.29 percent and 3.15 percent respectively, the electricity sector contracted by 15.3 percent in Q1 2026. That divergence is the clearest sign that supply-side constraints are still binding.

The Structural Constraints CPPE Wants Prioritised

Electricity, logistics, insecurity, agricultural productivity, infrastructure, regulatory costs and the cost of capital are identified as the major obstacles to faster productive-sector growth. The 15.3 percent electricity contraction is particularly striking because power is an input cost for nearly every business. CPPE's argument is that reducing these structural costs would do more for growth than further headline fiscal adjustments.

Subnational Revenues and the Risk of Prestige Spending

The assessment also raises a governance concern: reforms have expanded state governments' fiscal space through higher statutory allocations and, in many cases, stronger internally generated revenue. CPPE warns that this money must produce visible improvements in roads, healthcare, education, transport, agriculture infrastructure, security, power and enterprise support, rather than financing higher recurrent expenditure or prestige projects.

Trade and Interest-Rate Policy: The Calibration Question

On trade, CPPE wants calibrated protection for industries and agricultural producers that can demonstrate credible local capacity, while keeping access to critical inputs that cannot yet be sourced domestically. On financing, it argues that moderating inflation plus stronger fiscal-monetary coordination should create room for a gradual easing of financing costs without undermining the foreign-exchange stability already achieved.

From Stabilisation to Productivity: The Next Steps CPPE Is Demanding

• For the Federal Government's economic team: keep the reform trajectory, but publish next-phase benchmarks tied to the 3.89 percent Q1 GDP base, exchange-rate stability, reserves and trade surplus, with explicit productivity and job creation targets.
• For the central bank and finance ministry: as inflation moderates, use fiscal-monetary coordination to gradually reduce the high financing costs named by CPPE, while protecting the foreign-exchange stability already gained.
• For state governors: direct higher statutory allocations and internally generated revenue into visible roads, healthcare, education, transport, agriculture infrastructure, security and power, not recurrent or prestige spending.
• For trade policymakers: apply calibrated protection only to industries and agricultural producers with credible local capacity, while maintaining competitive access to inputs that cannot yet be sourced locally.
• For business leaders and investors: treat reform continuity as the central confidence signal, but factor in persistent near-term high electricity, logistics and regulatory costs and prepare for a possible gradual easing of financing rates.