This 12 months marked Nigeria’s uncommon financial turnaround in a minimum of a decade, with residents starting to really feel the early affect of sweeping authorities reforms.
In his Independence Day deal with on October 1, 2025, President Bola Tinubu had declared that “Nigeria has lastly turned the nook,” insisting that “the worst is over.”
BusinessDay examined key macroeconomic knowledge and on-the-ground realities to evaluate whether or not the nation has certainly emerged from its ‘shock remedy,’ a reform drive that fuelled inflation and unleashed the worst cost-of-living disaster in a era, whereas concurrently rebuilding investor confidence and attracting much-needed international change (FX).
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Nigeria’s disinflationary pattern persists in 2025
One of many largest turnarounds within the Nigerian financial system for 2025 was the continued cooling of headline inflation for the eighth consecutive month to 14.45 % in November, in contrast with about 34 % in the identical interval final 12 months.
The sustained disinflationary pattern noticed one in every of Africa’s largest economies beat its budgetary inflation goal for the primary time in six years. Although authorities launched into an overhaul of the Client Value Index (CPI) computations, which put the determine at round 24 % in January, deceleration in costs was largely pushed by slowing meals inflation.
Meals inflation, which additionally rose to greater than 34 % final 12 months, equallycooled to 11 %, although meals merchandise out there had been nonetheless comparatively dear for unusual Nigerians.
Specialists say that with the continued intervention by the federal government to make sure meals safety and the statistical base impact, inflation is anticipated to pattern at a single-digit charge within the coming 12 months.
Annual development quickened regardless of volatility of oil costs
Nigeria’s financial system expanded for the three quarters ended September 2025, with annual development choosing up essentially the most within the second quarter (Q2) at 4.23 %, the quickest in about 5 years. That contrasts with 3.86 % and three.76 % recorded within the third and fourth quarters of 2024.
The growth was primarily pushed by the booming non-oil sector, notably companies, which accounted for about 50 % of the Gross Home Product (GDP), and a big enchancment in agriculture, actual property, and knowledge and communication.
Whereas the nation launched into some statistical recalibration of its financial system to replicate new realities firstly of the 12 months, economists say key reforms within the oil and non-oil sectors are positioning Africa’s largest oil producer for sustained development within the coming 12 months, even because it targets a seven % development charge to fulfill its bold $1 trillion financial system within the subsequent 5 years.
The World Financial institution sees the financial system ending 2025 at 4.2 % whereas rising to 4.4 % by 2027, supported by companies, agriculture, and the non-oil business, successfully shifting the nation’s development prospect from oil, which is usually liable to volatility and geopolitical shocks.
Learn additionally: Nigeria’s December economy: Plenty of money, not enough market
Naira maintains uncommon stability as FX reserves swell
From September, the naira damaged beneath the 1500 per greenback psychological degree, helped by stronger oil export earnings and improved portfolio inflows that gave the nation’s exterior reserves a lift.
That calmness within the change charge market, with about 10 % acquire, contrasts with the sharp swings noticed final 12 months when the forex shed 41 % of its worth. Economists see the naira sustaining the 1440/$-1500/$ band even within the coming 12 months.
FX reserves additionally rose considerably, reaching its highest ranges in six years at over $45 billion in comparison with the $40.8 billion seen final 12 months.
Inventory market ASI greater than doubled in a single 12 months
The Nigerian inventory market skilled one in every of its strongest performances in a minimum of a decade, with the All Share Index surging to 184.69 as of December 23, 2025, in contrast with about 77 it closed final 12 months.
Regardless of dropping over $3 billion in its largest single-day fall in 15 years in November, the market got here again stronger with about 50 % year-to-date returns.
The native bourse neared a report N100 trillion valuation as market capitalisation reached N97.9 trillion. Bismarck Rewane, managing director of Monetary Derivatives Firm, sees the inventory market’s valuation reaching N262 trillion in 2026 on anticipated listings of mega corporates, together with the Dangote Refinery and the Nigerian Nationwide Petroleum Firm (NNPC).
Debt pressures name for warning
Nigeria’s debt ranges continued to rise, exerting fiscal pressures regardless of improved revenues.
Nigeria’s complete public debt surged to N152 trillion by mid-2025, pushed by change charge changes and recent borrowing, though the debt-to-GDP ratio remained average at about 40 %.
Exterior debt servicing, which reached a report $4.7 billion in 2024, strained the fiscal area, absorbing near 9 % of export receipts. With debt servicing estimated at over N15 trillion within the 2026 appropriation (about 50 % of projected income), the nation’s fiscal area stays constrained.
