By Joy Odor Reportcircle News
Nigeria is on the cusp of its strongest economic expansion in years, with new tax laws, improving foreign exchange access and deepening macroeconomic stability combining to push growth to at least 5.5 per cent in 2026, according to the Independent Media and Policy Initiative (IMPI).
In a hard-nosed policy outlook signed by its Chairman, Dr Omoniyi Akinsiju, the think tank declared 2026 a potential “boom year” for Africa’s largest economy, arguing that the payoff from reforms launched in 2023 is now materialising across key sectors.
IMPI said its bullish projection was anchored on a sober assessment of economic fundamentals rather than optimism, noting that both domestic and international economic actors now recognise Nigeria as a more predictable and better-managed economy.
The group applauded the Federal Government for staying the course through the early turbulence triggered by sweeping reforms, describing the initial pains as the unavoidable adjustment phase of a system being reset.
According to IMPI, those “storms” have largely passed, leaving behind a firmer policy foundation capable of sustaining growth.
At the heart of the projected expansion are the new tax reforms that took effect on January 1, 2026, which IMPI said would significantly strengthen revenue mobilisation and fiscal discipline.
Federation revenues are expected to rise on the back of phased tax implementation, tighter compliance enforcement, expanded digital revenue systems and stricter remittance controls across revenue-generating agencies.
Beyond revenue, the think tank said the reforms mark a fundamental shift in Nigeria’s industrial policy, particularly for manufacturers.
The new regime introduces Economic Development Tax Incentives for priority sectors, with manufacturing taking centre stage.
Eligible firms can obtain an Economic Development Incentive Certificate, granting a five per cent annual tax credit on qualifying capital expenditure for up to five years, with extended benefits for companies that reinvest profits.
Certain manufacturing-related transactions are also exempt from stamp duties, easing operational costs.
IMPI identified surging capital expenditure by private sector players as a powerful early signal of an economy gearing up for expansion.
Companies across oil and gas, telecommunications, banking, industrial goods and agriculture are acquiring property, plant and equipment to scale operations and consolidate market positions.
It cited major 2025 investments, including MTN Nigeria Communications Plc’s N539.6 billion capital acquisition, Presco Plc’s 10,000-hectare plantation purchase in Cross River State, and Ellah Lakes Plc’s acquisition of more than 11,700 hectares across four states, describing them as strategic bets on future demand and domestic capacity.
These investments, IMPI noted, are designed to expand production, substitute imports and deepen local value chains, with direct implications for output growth and job creation.
Another key driver is Nigeria’s rapidly improving foreign exchange environment.
The country climbed 15 places to rank fourth in Africa for FX accessibility in the Absa Africa Financial Markets Index 2025, a development IMPI described as a critical boost to investor confidence.
Improved FX access, it said, lowers entry barriers for foreign direct investors and enhances ease of doing business.
IMPI attributed the FX gains to sweeping reforms by the Central Bank of Nigeria, which have transformed how investors access and deploy foreign currency.
The impact is already visible in capital flows, with foreign direct investment rising to $720 million in the third quarter of 2025, while portfolio investment surged to $2.51 billion, reflecting renewed non-resident participation in Nigeria’s debt and equity markets.
Looking ahead, the think tank projected even stronger FDI inflows and improved FX liquidity in 2026, reinforcing growth momentum.
IMPI also pointed to the stabilisation of key macroeconomic indicators as a decisive factor that would lift manufacturing output and private sector confidence.
It described macroeconomic stability as the bedrock of sustainable growth, citing empirical evidence that links balanced fiscal, monetary and external accounts with higher investment, productivity and long-term expansion.
With demand, output, fiscal revenues, savings and investment increasingly aligned, IMPI concluded that Nigeria is entering a phase where reforms are no longer theoretical but translating into measurable economic acceleration.
