Nigeria’s Bold Economic Reforms: Progress and Challenges in 2025

Economic Transformation and Reform Progress

Nigeria has demonstrated significant progress in 2025, achieving its revenue target by August, with the majority of earnings coming from the non-oil sector. The country has implemented major reforms over the past two years, improving macroeconomic stability and enhancing resilience, successfully tapping the Eurobond market and earning a credit rating upgrade.

Current Economic Landscape

Nigerian policymakers have undertaken bold reforms over the last two years. The government and Central Bank of Nigeria have liberalized the foreign exchange market, halted central bank financing of the fiscal deficit, and reformed fuel subsidies. As a result, international reserves have increased, and access to foreign exchange in the official market has improved. The country has successfully returned to international capital markets, and a new domestic, private refinery is positioning Nigeria up the value chain in a fully deregulated market.

Challenges and Future Outlook

The International Monetary Fund projects growth of about 3% for 2025, below the 4% projected for sub-Saharan African countries. This lower growth rate is attributed to reduced oil production, security challenges in various regions, and foreign exchange scarcity affecting manufacturers.

The country continues to face significant social and economic challenges, including banditry and kidnappings in the northwest, ongoing insurgency by terrorist groups in the north-east, and separatist agitations in the south-east. President Tinubu has consistently pledged to address these security issues and transform the economy.

Government Initiatives and Reform Agenda

The government’s Renewed Hope Agenda focuses on building critical infrastructure, improving health facilities, ensuring food sovereignty, and providing security. Recent reforms are viewed as a launching pad for a new social compact for Nigeria’s development. Strengthening macroeconomic fundamentals is expected to enable structural reforms and restore economic growth. The goal is to transition to a better-funded and more effective State that provides efficient public services, public goods, and a conducive environment for private sector growth and job creation.