IMPI Outlines Key Drivers of Nigeria’s Projected Economic Expansion in 2026

IMPI Outlines Key Drivers of Nigeria’s Projected Economic Expansion in 2026

The Independent Media and Policy Initiative (IMPI) has highlighted new tax laws and sustained macroeconomic stability as major factors set to drive Nigeria’s economic growth by at least 5.5 percent in 2026.

In its latest policy statement signed by Chairman Dr. Omoniyi Akinsiju, the policy think tank projected that the year 2026 would mark a significant economic leap for Nigeria, buoyed by the federal government’s steadfast commitment to ongoing reforms.

According to IMPI, “Understanding the background to current developments and the philosophical underpinning of the economy, we submit that the year 2026 would be Nigeria’s boom year yet.

“We did not arrive at this projection lightly. First, as now attested to by global and domestic economic players, the Nigerian economy has been a well-managed affair since the reforms kick-started in 2023. We commend the Federal Government for staying the course despite the initial economic headwinds, which were the result of the economy adapting to the hypodermic impact of the reforms.”

The group noted that the tax reforms, which took effect on January 1, 2026, are expected to significantly improve Nigeria’s tax mobilization. Federation revenue, it stated, will strengthen further through phased tax implementation, stricter compliance enforcement, greater deployment of digital revenue systems, and improved remittance discipline across revenue-generating agencies.

IMPI added that the reforms would reshape how manufacturers operate, invest, and plan for growth, as the new law signals a shift toward a more coordinated and incentive-driven fiscal environment. Central to this shift are the newly introduced Economic Development Tax Incentives targeting priority sectors such as manufacturing.

Under the scheme, eligible companies can obtain an Economic Development Incentive Certificate that grants a five percent annual tax credit on qualifying capital expenditure for up to five years. Firms that reinvest profits may enjoy extended incentive periods, while certain manufacturing-related transactions are exempt from stamp duties.

The think tank also pointed to rising capital acquisition by private sector operators as another indicator of an impending economic boom.

“A major indicator of an expanding economy is the increasing capital acquisition by private sector operators. Nigerian companies—particularly in the oil and gas, telecoms, banking, industrial goods, and agricultural sectors—are actively acquiring property, plant and equipment to expand operations and strengthen market positions,” the statement read.

Notable 2025 transactions include MTN Nigeria Communications Plc topping capital expenditure charts with N539.6 billion, Presco Plc’s acquisition of a 10,000-hectare plantation in Cross River State, and Ellah Lakes Plc’s acquisition of over 11,700 hectares across four states.

IMPI noted that these investments are geared toward expanding capacity, meeting rising consumer demand, and reducing import dependence—developments that will boost domestic production.

It also highlighted Nigeria’s improved foreign exchange environment, stating that the country moved up 15 places to rank 4th in Africa for FX accessibility in the Absa Africa Financial Markets Index 2025. This improvement, it said, is a direct outcome of sweeping FX reforms introduced by the Central Bank of Nigeria (CBN).

Foreign investment inflows have also strengthened, with Foreign Direct Investment rising to $720 million in Q3 2025 and portfolio investment reaching $2.51 billion—reflecting growing non-resident participation in domestic debt and equity markets.

“We see a further rise in foreign direct investment in 2026 along with increased access to FX,” IMPI noted.

The think tank further emphasized that sustained macroeconomic stability will continue to enhance manufacturing output, arguing that growth, investment, and productivity are positively correlated with macroeconomic balance.

“Macroeconomic stability is the cornerstone of any successful effort to increase private sector development and economic growth. It exists when key economic relationships are in balance—for example, among domestic demand and output, the balance of payments, fiscal revenues and expenditure, and savings and investment,” it added.