As Nigeria enters the second half of 2025, a full economic recovery will depend on coordinated policy actions across inflation control, exchange rate management, manufacturing revival, energy reform, debt sustainability, and improved security.
The chief economist and partner, SPM Professionals, Dr. Paul Alaje, told NATIONAL ECONOMY that sequel to initial policy changes, the first half of the year has been marked by some improvements in inflation, recalling that after the rebasing of inflation the number has nosedived to circa 23 percent. “GDP growth rate has steadied at above 3 per cent. Exchange rate has also steadied at between N1,500 to N1,600/$1,” he said.
“For the remaining half of the year, we are very hopeful that there will be some improvements given the new reality that we see ourselves in. One thing that happened last quarter is the passage of the New Tax Bill into law, which will have implications on revenue drive. I believe we will start seeing the preparation for the implementation of that over the next half year.
“I think the government should put a lot of energy into exports going forward, especially non-oil exports. In the first half, not so much improvements in our oil exports were made. We are hoping that in the second half of the year we will see a significant improvement in our oil exports because if we don’t boost exports large enough we will still have significant challenges on the quality of money,” he said.
Also, the president of the Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, said by and large, economic indices have improved in H1 2025, compared to 2024. He stated that whereas in 2024 there was instability due to perceived policy inconsistencies that were accompanied by anxiety among investors, there was improvement in H1 2025. He said, “We are beginning to see some stability in the economy; many companies have started to adjust to the new reality.
“I just hope that the government will do all in its power to ensure that the stability we are experiencing will continue; there is the need to ensure that insecurity will be reduced to its barest minimum so that people can be able to budget. If things continue as they are now I believe the economy will be okay for that,” he said.
The chief executive of AntHill Concepts Limited, and member of the Board of Economists, NATIONAL ECONOMY, Dr. Emeka Okengwu, said he thinks Nigeria is beginning to get real as a country as the realities of the social and economic conditions hit hard. He said it was a good thing that Nigeria made an inroad into BRICS, which is a major boost. “I also think that the relationship we are developing with China is a good one; I also think the relationship we are developing with India is a good one.
“Where I think we should devote a lot of energies is on social migration, which is where the cassava project comes into play. Cassava has the capacity to create a very vibrant economy that can be localised. It will support our livestock; it will support our rural economy. If we are able to up the talk on the cassava thing that we know everybody can get involved in, we can be sure we have one thing that can be diversified in many ways, including pharmaceuticals, food security and energy in the form of ethanol. So, it’s work in progress for me,” he added.
Recent data from the National Bureau of Statistics(NBS) shows headline inflation remained elevated at approximately 24 per cent in April 2025. Rising food, transportation, and energy costs have squeezed consumer purchasing power and limited business growth. In response, the Central Bank of Nigeria(CBN) raised its benchmark interest rate to 27.5 per cent, aiming to control inflation and restore monetary stability following years of fuel and foreign exchange subsidy-induced distortions.
In the foreign exchange space, the Central Bank’s efforts to unify official and parallel market rates have helped narrow arbitrage opportunities and stabilise the naira. These reforms have encouraged renewed investor interest and improved liquidity. However, Alaje maintains that lasting foreign exchange stability depends on increased export earnings and prudent reserve management.
The manufacturing sector, often regarded as a key driver of job creation, has shown mixed results. While nominal output in the second half of 2024 climbed by 35 percent to N33.4 trillion, real growth was just 1.7 per cent, revealing the inflationary drag on production. Industry players cite high energy tariffs, restricted access to foreign exchange for machinery and raw materials, and aging infrastructure as barriers to growth. Development economist at Adeleke University, Professor Tayo Bello, recommended investing in renewable energy sources and easing FX restrictions to reduce overhead costs and boost output.
In the power sector, government subsidy reductions have improved cost recovery, generating N700 billion in additional revenue as of April 2025. Yet, the national grid continues to operate at only a third of its 13,000 megawatts installed capacity. “Problems such as gas shortages, electricity theft, and financial insolvency of distribution companies persist, cited John Ejuah, an energy consultant in Lagos. He said expanding gas infrastructure, micro-grids, and enforcing collection efficiency are seen as key strategies to lower energy costs and encourage investment.
Nigeria’s debt profile presents another concern. From 2020 to 2024, debt servicing accounted for 60 per cent of total government revenue, amounting to circa N30.8 trillion. Total public debt stood at N149 trillion by mid-2024 and could reach N188 trillion by the end of this year.With nearly half of government spending consumed by interest payments, funding for public services is under pressure. Fiscal analysts stressed the need to slow borrowing, broaden the tax base, and stimulate revenue from non-oil sectors.
Despite efforts to ramp up crude oil production to approximately 1.5 million barrels per day, global oil prices have dipped to around $66 per barrel, well below Nigeria’s budget benchmark of $75. The IMF has advised that Nigeria revise its budget assumptions and redirect savings from fuel subsidy reforms into social investments and economic buffers.
“Insecurity continues to undermine progress.Violence and conlict, particularly in the Middle Belt and northern states, have hampered farming, trade, and investor confidence,” Igbrude said. Data shows that each 1 per cent rise in violence reduces agricultural productivity by as much as 0.3 per cent. “Although some regions have reported improved security conditions, more work is needed to restore confidence, especially in rural economic zones,” he added.
“To accelerate recovery, Nigeria must double down on inflation control, ensure access to affordable power, support manufacturers, manage its debt prudently, and safeguard communities from violence. Economic rebound is possible, but only through clear, sustained reform and political commitment,” Bello added.
Between Depleting Workforce And Declining Productivity