The Centre for the Promotion of Private Enterprise (CPPE) has said the Nigeria economy recovery remains on a gradual path following the release of the National Bureau of Statistics (NBS) Q1 2026 Gross Domestic Product report, which showed real GDP growth of 3.89 percent year-on-year compared to 3.13 percent recorded in the corresponding period of 2025.
The CPPE, in its review of the Q1 2026 GDP report, described the performance as a continuation of gradual macroeconomic improvement, driven largely by resilience in the services sector, trade activities, construction and expanding domestic production capacity.
The report noted that the economy is still operating under structural constraints, including weak industrial output, power sector instability, and limited export competitiveness, despite signs of improved stability in key macroeconomic indicators. According to the think tank, the Nigeria economy recovery is being shaped by a mix of stabilising reforms and persistent structural weaknesses that continue to affect productivity and inclusive growth.
The CPPE highlighted that the 3.89 percent GDP growth reflects improvements in several key sectors, particularly:services sector expansion, stronger trade activities, construction growth, emerging gains from domestic refining and production activities
It also noted that improved macroeconomic stability and better business confidence have supported economic activity across non-oil sectors. The CPPE, however, cautioned that while growth is positive, it remains uneven and not yet strong enough to significantly transform living standards.
Despite the reported improvement, the CPPE stressed that major structural challenges continue to limit the pace of the Nigeria economy recovery. These include:
- Weak electricity and gas sector performance
- Low industrial productivity
- High operating costs for businesses
- Fragile oil output performance
- Weak export capacity and limited global competitiveness
The centre noted that these constraints continue to reduce employment generation capacity and limit the welfare impact of economic growth.
A major concern raised in the review is the weak contribution of manufacturing to overall GDP. The CPPE explained that although manufacturing showed modest improvement, its overall share remains below 10 percent, highlighting ongoing structural weaknesses in Nigeria’s industrial base. It warned that without stronger industrialisation, the Nigeria economy recovery may remain consumption-driven rather than production-led.
The report also flagged the electricity and gas sector as the weakest-performing segment in the quarter, recording a significant contraction. CPPE described this as a serious concern for businesses and households, noting that unreliable electricity supply continues to increase production costs and force reliance on expensive alternative energy sources such as diesel and petrol generators. It stressed that sustainable growth cannot be achieved without stable and affordable energy infrastructure.
Looking ahead, the CPPE maintained a cautiously optimistic outlook for the Nigeria economy recovery, but warned that risks remain elevated.
Key risks include: Global oil price volatility, Inflationary pressures, Weak power supply, High borrowing costs, Structural productivity constraints. The organisation urged policymakers to prioritise industrialisation, power sector reforms, and export diversification to strengthen long-term growth.
