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

While many are hopeful for a brighter economic future, particularly as we look towards 2026, a cautionary note has been sounded by a prominent economic voice. Muda Yusuf, the esteemed Chief Executive Officer of the Centre for Promotion of Private Enterprises (CPPE), warns that two significant headwinds could derail a potentially positive economic outlook: escalating insecurity and persistent resistance to crucial tax reforms.

The Pervasive Shadow of Insecurity

It’s no secret that a stable environment is the bedrock of economic prosperity. Yusuf highlights that the lingering and, in some regions, worsening state of insecurity poses an existential threat to business operations and investor confidence. When businesses fear for their assets, personnel, and supply chains, investment dwindles. Agricultural productivity suffers in affected areas, leading to food scarcity and inflation. Tourism and other service sectors, vital for job creation, are stifled. Ultimately, insecurity erodes consumer confidence, dampens purchasing power, and diverts scarce resources from productive investments towards security measures, creating a vicious cycle that chokes economic growth.

The Tug-of-War Over Tax Reform

Beyond the immediate physical threats, Yusuf points to the internal struggle surrounding tax reform. Effective and equitable tax systems are essential for government revenue generation, funding critical infrastructure, social services, and creating an enabling environment for businesses. Resistance to well-thought-out tax reforms can stem from various quarters – vested interests, lack of understanding, or concerns about implementation. However, without a progressive and efficient tax regime, the government’s capacity to stimulate growth, address inequalities, and provide essential public goods is severely hampered. This resistance can lead to a reliance on unsustainable revenue sources, increased borrowing, or simply an inability to fund necessary developmental projects, all of which ultimately undermine long-term economic stability and growth prospects for 2026 and beyond.

What This Means for 2026

The CPPE’s assessment serves as a critical reminder that economic forecasts, no matter how optimistic, are contingent upon addressing fundamental challenges. A positive outlook for 2026 requires more than just favorable global conditions; it demands decisive action on the home front. Tackling insecurity through comprehensive strategies and fostering a collaborative approach to implement essential, fair, and growth-oriented tax reforms are not merely policy options but imperative prerequisites for unlocking the nation’s full economic potential.

Muda Yusuf’s insights underscore a vital message: the path to a robust economic future is paved with security, sound policy, and a collective will to overcome obstacles. Ignoring these warnings could mean a squandered opportunity for prosperity.

Source: Original Article