Nigeria’s Economy on Firm Growth Path

By Wale Edun

Nigeria today stands at a critical juncture of economic renewal, having embarked on a promising trajectory toward sustainable growth and prosperity. The challenging years of fiscal instability, triple-digit inflation, and market misalignments are gradually yielding to resilient reforms and renewed investor confidence.

When President Bola Tinubu assumed office in 2023, he inherited an economy teetering on the edge of collapse, burdened by distorting fuel subsidies, fragmented exchange rate regimes, and sluggish private investment. Through decisive dismantling of these market inefficiencies and an unwavering focus on rewarding productivity, his administration laid the foundation for macroeconomic stabilization.

Recent data attest to the positive momentum: Nigeria’s GDP expanded by around 4.23 percent in the second quarter of 2025, supported by buoyant non-oil sectors and a rejuvenated oil industry reaching 1.68 million barrels per day production. Inflation, though still elevated, has eased to near 18 percent, continuing a six-month downward trend. The foreign exchange market has stabilized with the gap between official and parallel rates narrowing dramatically, while foreign reserves have climbed above $43 billion, marking the highest level since 2019 ​.

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However, beyond the headline numbers lie the everyday pressures Nigerians face. Food inflation remains a critical concern, with costs having surged amid currency depreciation and subsidy removals. Encouragingly, staple commodities like rice, garri, and tomatoes have seen notable price reductions, aided by targeted government interventions that seek to support smallholder farmers and stimulate agricultural production. The government has disbursed direct cash support to over 8 million households to alleviate hardships while refining identity verification to reach a target of 15 million ​​.

Fiscal constraints continue, with debt servicing consuming a significant portion of government revenues—a legacy of past borrowings compounded by high interest rates. Nigeria’s tax revenue-to-GDP ratio remains low, limiting expenditure on critical sectors such as health, education, and infrastructure. To remedy this, new tax legislation effective from January 2026 aims to broaden the tax base, enhance compliance, and introduce progressive rates, thereby laying the groundwork for increased fiscal space to invest in people ​.

Key sectors are being prioritized for inclusive growth. The oil and gas industry is recovering, fuelled by better security and infrastructure projects such as the Ajaokuta–Kaduna–Kano gas pipeline and expansive fibre optic networks enhancing connectivity and boosting industrialization efforts. Agricultural policies emphasize food self-sufficiency and export diversification, while investments in technology and the creative economy seek to harness Nigeria’s youthful dynamism ​​.

Ultimately, the revival of confidence among investors, citizens, and multilateral partners signals Nigeria’s turning point. Achieving the medium-term growth goal of seven percent by 2027/28 requires steadfast policy discipline, collaborative governance, and broad private sector engagement. With resilience deepened and opportunities expanded, Nigeria’s next decade is poised to be defined by shared prosperity and renewed hope.

-Edun is the Minister of Finance and Coordinating Minister of the Economy