Nigeria’s 4.43% growth fails to boost company margins
By the AFREEQUE newsroom, based on Business Day Nigeria
Despite growth of 4.43% in the second quarter of 2026, its best performance in five years, Nigerian businesses still face high borrowing costs, weak consumption and political uncertainty. KPMG says these factors could prevent the macroeconomic recovery from improving companies’ profits and cash flow, Business Day Nigeria reports.
Nigeria’s economic growth may not translate into higher business margins, as companies face high borrowing costs and weak demand, KPMG has warned. Oluwole Adelokun, KPMG’s partner for strategy and customer solutions in West Africa, said improved macroeconomic indicators do not guarantee better profitability or greater purchasing power.
Nigeria’s gross domestic product grew by 4.43% in the second quarter of 2026, its fastest pace since the second quarter of 2021, according to the National Bureau of Statistics. Headline inflation stood at 14.63% in September, down from 20.98% a year earlier, while food inflation reached 19.50%. Foreign exchange reserves rose to $55.2 billion in October.
These indicators coexist with a policy rate of 23%, following a cut of 350 basis points in September, and an exchange rate of 1,368.3 naira to the dollar in October. Adelokun cited the cost of doing business, access to finance, exchange-rate stability, regulation, purchasing power and infrastructure among the factors weighing on competitiveness.
KPMG believes that the 2027 general elections could add uncertainty over economic reforms, taxation, regulation and public spending. INEC, Nigeria’s electoral commission, has stepped up security ahead of the poll, according to a report published on 31 October.
