Insecurity, Tax Reform Resistance Threaten Positive Economic Outlook for 2026 – CPPE

Nigeria’s economic future holds promise, with various projections pointing towards a positive outlook for 2026. However, a renowned economist, Muda Yusuf, who serves as the Chief Executive Officer of the Centre for Promotion of Private Enterprises (CPPE), has issued a significant cautionary note. According to Yusuf, two critical challenges loom large, threatening to derail these optimistic forecasts: pervasive insecurity and stiff resistance to essential tax reforms.

The Shadow of Insecurity: A Drag on Economic Potential

Insecurity, in its myriad forms, remains a formidable obstacle to economic growth and stability. From banditry and kidnapping to insurgency and communal conflicts, the impact is felt across various sectors. Investment, both local and foreign, shies away from volatile regions. Agricultural productivity, a cornerstone of Nigeria’s economy, is severely hampered as farmers fear for their lives and abandon their lands. Supply chains are disrupted, transportation costs soar, and overall economic activity is stifled. Yusuf’s concern highlights how a failure to decisively tackle insecurity will continue to undermine investor confidence and stifle the productive capacity needed for robust economic expansion.

Tax Reform Resistance: A Hindrance to Sustainable Revenue

The current tax system in Nigeria is often criticized for its complexities, inefficiencies, and narrow base. Efforts to reform the tax regime are crucial for broadening the government’s revenue streams, reducing reliance on oil, and fostering a more equitable and efficient tax environment. However, resistance to these reforms, often from various vested interests or segments of the populace wary of increased burdens, poses a significant threat. Muda Yusuf emphasizes that without successful and comprehensive tax reforms, the government will struggle to generate adequate revenue to fund critical infrastructure, social services, and other developmental projects essential for long-term economic prosperity.

CPPE’s Call to Action

The CPPE’s assessment underscores the urgent need for decisive action from policymakers. Addressing insecurity is paramount, requiring a multi-faceted approach that combines robust law enforcement with socio-economic interventions. Simultaneously, building consensus and effectively communicating the long-term benefits of tax reforms are vital to overcome resistance and implement changes that will ensure a more stable and prosperous economic future for Nigeria. Ignoring these critical issues could turn the optimistic economic projections for 2026 into a missed opportunity.

Source: Original Article