Nigeria is a multi-ethnic and culturally diverse federation of 36 autonomous states and the Federal Capital Territory. The political landscape is partly dominated by the ruling All Progressives Congress party (APC) which controls the executive arm of government and holds majority seats at both the Senate and House of Representatives, and majority of the States.
President Bola Ahmed Tinubu was sworn into office on May 29, 2023, having won the February 2023 Presidential election. Nigeria continues to face many challenges that include insecurity such as banditry and kidnappings especially in the northwest region, continued insurgency by terrorist groups in the north-east, and separatist agitations in the south-east.
Nigeria faces a persistent challenge in absorbing the 3.5 million people entering its labor force annually. Weak job creation, limited entrepreneurial opportunities, and rising emigration reflect the economy’s inability to generate sufficient quality employment.
Despite recent reforms, poverty remains widespread—over 46% of Nigerians live below the poverty line, with food inflation disproportionately affecting poor households who spend up to 70% of their income on food.
State capacity remains weak in many regions, with limited delivery and widespread insecurity. Infrastructure gaps—especially in electricity, transport, and logistics—continue to hinder domestic market integration and productivity.
Recent macroeconomic reforms offer a foundation for a new social compact. Stabilizing inflation, improving fiscal transparency, and enhancing exchange rate flexibility have created fiscal space. If sustained, these reforms can enable deeper structural changes—such as improved public service delivery, better infrastructure, and a more conducive environment for private sector-led growth.
With targeted investments in human capital, social protection, and climate resilience, Nigeria can shift from a low-equilibrium trap to a more dynamic and inclusive growth path.
Economy
Following the May 2023 change in administration, Nigeria has embarked on bold macroeconomic reforms aimed at restoring stability and growth. Key measures included the full removal of the gasoline subsidy, unification of the exchange rate market, and a shift to market-reflective pricing—steps that have reduced fiscal distortions and improved external balances. The Central Bank has tightened monetary policy and refocused on price stability, while also ending deficit monetization.
Nigeria’s GDP grew by 3.9% in H1 2025, foreign reserves surpassed $42 billion, and public debt declined is projected to decline from 42.9% in 2024 to 39.8% in 2025. While inflation has begun to ease, it remains high, especially food inflation, which disproportionately affects poor households who spend up to 70 percent of their income on food. The cost of a basic food basket has risen fivefold since 2019.
To cushion the impact, the government has launched targeted cash transfers for vulnerable households, which need to be scaled and institutionalized. Sustained progress will require continued monetary discipline and further expansion of fiscal space through higher revenues, greater transparency, and more efficient spending. Structural reforms are also critical—removing trade barriers, improving logistics and power supply, and enhancing the business environment.
Nigeria’s new policy direction is improving competitiveness and attracting investment. Yet, bridging the gap between macroeconomic gains and improved livelihoods demands urgent action to lower food inflation, improve public spending efficiency, and expand social safety nets.
Last Updated: Oct 13, 2025
