CPPE mulls targeted policies to ease cost-of-living pressures, despite GDP growth
The Centre for the Promotion of Private Enterprise (CPPE) has said that the social outcomes of economic reforms has continued to weigh on households, noting that, despite improving fundamentals, disinflation is ongoing, prices of some food items and manufactured products are easing, but cost of living crisis has continued unabated and cause of concern nationwide.
It explained that although this reflects a slight moderation from the 4.3 percent growth recorded in the second quarter, the data confirms that the economy remains firmly on a path of steady recovery and consolidation.
CPPE in a policy brief on the third quarter 2025 gross domestic product (GDP), released on Monday by the National Bureau of Statistics (NBS), said the 3.98 per cent GDP growth in Q3 2025 shows the economy remains firmly on a path of steady recovery and consolidation, in contrast to slight moderation from the 4.3 percent growth recorded in the second quarter.
The policy brief document, signed by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, stated that the Quarter three (Q3) performance highlights the positive impact of ongoing economic reforms, especially in stabilising the exchange rate, moderating inflation, improving fiscal conditions, and gradually restoring investor confidence, noting that these macroeconomic gains have strengthened business sentiment and supported activity across key sectors of the economy.
Dr. Yusuf said it is now imperative for policymaking to prioritise targeted interventions to address the uneasiness around the cost of living and ensure that GDP Growth and macroeconomic stability translate into real improvements in citizens’ welfare, particularly for vulnerable groups.
He maintained that the sustained recovery recorded in Q3 is largely supported by: Greater exchange rate stability resulting from FX market reforms; Decelerating inflation, easing cost pressures on households and businesses; Improved investor confidence, reinforcing growth in financial services, ICT, construction, and other segments of the services sector.
CPPE boss affirmed that these developments demonstrate that the government’s reform programme is beginning to generate tangible and measurable outcomes across the economy.
CPPE in its cursory look at the sectors and their performance, opined that the services sector maintained its position as the largest contributor to GDP, accounting for 53 per cent of total output, adding that the continued resilience of the sector, supported by digital adoption, financial services expansion, and improved business confidence, remains central to overall economic performance.
It noted that Agriculture grew by 3.79 per cent, up from 2.82 per cent in Q2, adding “Despite this modest improvement, insecurity in farming communities, weak rural logistics, limited mechanisation, and declining purchasing power continue to constrain full-scale recovery.”
It decried the performance of the manufacturing sector as one of the weakest performances across major sectors even though it expanded by 1.25 per cent.
It highlighted the problem of the sector’s persistent high energy and logistics costs; costly borrowing conditions; dependence on imported industrial inputs; as well as smuggling of competing products, stressing that these structural weaknesses continue to erode competitiveness and limit job creation.
According to the Centre, the ICT sector grew by 5.78 per cent, slightly below its Q2 growth of 6.6 per cent.
“The real estate posted an exceptional 89 per cent nominal GDP growth, fuelled by rising property values and asset revaluation. While favourable for investors in the sector, this trend intensifies housing affordability challenges, especially in major cities. Land administration reforms and affordable housing initiatives have become urgent,” CPPE added.
CPPE acknowledged the financial services as the best-performing major economic sector, expanding by 19.63 per cent, up from 6.13 per cent in Q2, adding “This reflects increased economic activity, stronger fiscal operations across all levels of government, and rising confidence in the financial system.”
To consolidate the gains recorded in Q3 and unlock stronger, more inclusive growth, the Centre recommends that the government should reduce structural bottlenecks by addressing energy supply constraints, reduce logistics costs, improve port efficiency, and accelerate transport infrastructure development.
The trade sector experienced slow and fragile recovery, and grew by 1.98 percent, up from 1.29 percent in Q2 as high import costs, weak consumer demand, and ongoing import-substitution measures continue to constrain growth.
“Nevertheless, Nigeria has recorded consistent trade surpluses, bolstering the balance of payments,” it added.
CPPE averred that recovery was still limited in social sectors as education and health grew by 2.51 percent and 2.89 percent, respectively, stressing that these modest gains reflect under-investment, underscoring the need for expanded public spending and stronger governance across social services.
Dr. Yusuf pointed out that the textile and apparel sector remained in recession, contracting by 2.41 percent, mainly due to high production costs and smuggling; The paper and pulp sector also contracted by 1.07 percent, while several other sectors—including crude petroleum and gas, manufacturing, real estate, ICT, cement, transportation, iron and steel, rubber and plastics, and food and beverages—showed slower growth compared to the previous quarter.
The Centre posited that conversely, sectors such as financial services, oil refining, pharmaceuticals, construction, auto assembly, broadcasting, entertainment, education, and health recorded accelerated growth, albeit from relatively low bases.
CPPE encapsulated the policy imperatives for sustaining recovery, consolidate the gains recorded in Q3, unlock stronger and more inclusive growth through policy interventions which include: “Reduce Structural Bottlenecks; Address energy supply constraints, reduce logistics costs, improve port efficiency, and accelerate transport infrastructure development.
“Mitigate the Cost-of-Living Crisis; Implement targeted social interventions and remove structural impediments that elevate consumer prices. All tiers of government [local, state and federal] must sustain targeted interventions in agriculture, pharmaceuticals, transportation and energy to fix the cost of living crisis.
“Strengthen Agricultural Productivity: Improve security in farming regions, expand irrigation and storage facilities, invest in rural road networks, and support mechanisation.
“Rebuild Manufacturing Competitiveness: Expand access to concessionary credit, curb smuggling, reduce import duties on industrial inputs, ease logistics challenges and address supply chain pressures.
“Address Housing Affordability: Reform land administration, deepen mortgage markets, and scale up affordable housing initiatives.
“Increase Funding for Social Sectors: Prioritise investments in education and health, strengthen partnerships with private sector players, and enhance governance of service delivery systems.
“Enhance Non-Oil Export Competitiveness: Support exporters with reduced financing and production costs, and strengthen export logistics, certification, and standards.
“Stabilise Oil Output and Secure Critical Infrastructure: Improve security in oil-producing regions, curb vandalism and theft, and incentivise new investments in upstream and gas-based industries.”
CPPE acknowledged that Nigeria’s Q3 GDP performance reaffirms that the economy is on a gradual but steady recovery path, supported by improved macroeconomic stability, stronger investor sentiment, and resilience across key sectors such as services, ICT, financial services, chemical and pharmaceutical and construction.
However, the Centre insisted that achieving higher, more inclusive, and sustainable growth will require tackling long-standing structural constraints—especially in agriculture, manufacturing, and trade, adding that targeted policies to ease cost-of-living pressures are crucial to making the reform process inclusive.
“With continued reforms, targeted investments, and strengthened governance, Nigeria is well-positioned to deliver stronger economic outcomes in the months ahead,” Dr. Yusuf emphasized.