- Manufacturing has stabilised
- Gains begin to reach average Nigerians
Economists, finance experts and business leaders yesterday agreed that President Bola Ahmed Tinubu’s macroeconomic reforms have led to re-emergence of Nigeria as a stable and promising economic powerhouse.
Experts, in different presentations, outlined that tough decisions taken by the Tinubu’s government had reset the economy, with gains in economic growth, foreign exchange (forex) inflows, national forex reserves, foreign direct and portfolio inflows, currency stability and international ratings.
They, however, said while the policies have restored investors’ confidence, there is need for consumers’ confidence.
The consumers’ confidence is what will make the common man feel the full impact of the policies.
Chief Executive Officer of Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the reforms had taken the country from the point of uncertainty to certainty with a stable outlook that’s increasingly reassuring to investors.
He said an objective analysis of the government’s reforms must be in the context of the precarious position of the economy in early 2023, noting while the reforms were tough on the people, it was the drastic actions that saved the country from a worsening situation.
Yusuf, a former director general of Lagos Chamber of Commerce and Industry (LCCI), spoke yesterday during a programme, “Factfile”, on Ray Power FM monitored in Lagos.
He said: “I understand the pains and I understand the anger. But the issue is that when a system is broken, to fix a system that is broken is a challenging thing. And when you are trying to fix the system, a broken system, fundamentally broken, I must say, it causes a lot of pain. It’s like undertaking a major surgery on a patient that is almost dying. That was the situation they were in. I’m not holding brief for them, but that was the situation that the administration was in”.
He said if the government had not taken the path of reforms, Nigeria would have been in worse situation, describing the reforms as “inevitable” to ensure that the patient survives.
“These things normally will come with pains, but I can see that the worst of those pains is over. Things are beginning to get better. We are beginning to see recovery. The situation today is not as bad as the situation yesterday. The situation yesterday was not as bad as it was before. I’m talking of 2025 and 2024. The situation has improved, and we are seeing that it is gradually continuing to improve. So that context is important,” Yusuf said.
Yusuf, who spoke extensively on the state of the economy, said businesses have regained a lot of stability, one of the prerequisites for faster economic growth that would positively influence living conditions.
He said: “Are we taking the right path so that business owners will do well? Of course, we are on the right path. If you talk to businessmen, those who are in business-because, of course, there is a difference between what the business is experiencing and what the ordinary man is experiencing. For businesses, you are talking about profitability, prosperity of business and all that. For the ordinary people, you are talking about welfare. These are different conversations. But as much as possible, we need to activate policies to make them converge.
“In terms of businesses, if you talk to those in the corporate environment, their experience last year was bad. Even the big businesses, many of them were posting losses, heavy losses. Some of them had to leave the country because of the shocks of the reform.
“It was bad. But when you compare 2024 to 2025, many of those businesses that were posting losses, many of them have returned to profitability. Some companies are even coming back to the country.
“New investors are coming into the country. Our reserves, our net reserve that was less than $5 billion is now over $20 billion.Gross reserves the day before was $43 billion.
“These things are not just statistics. You need the results to support your currency. When you look at the stability of the currency, you can’t compare the stability of the exchange rate today with what we had last year or with what we had in the second half of 2023. That’s the time some people were predicting that we would get to N2,000 to $1. Last year it was getting to around N1,800 to $1. Now, exchange rate is falling below N1,500. These are things that we must also appreciate. And they are not just statistics. When you have a stable exchange rate, it has a way of ensuring things are also done in a more investment-friendly manner. There was a time last year, even the tomato sellers were talking about dollar exchange rate volatility. Everybody became aware of the dollar. But those concerns are beginning to dissipate.
“So, those are some of the improvements. We are no longer importing fuel the way we used to import. Subsidy regime was almost killing the economy. We were spending almost all our foreign exchange earnings to import fuel. And it’s not only the subsidy. The worst part of it was the corruption component of the subsidy. People became billionaires without doing anything. So, the economy was bleeding, both from the subsidy and from the foreign exchange. Those were the issues.
“Now, at least fundamentally-because we need to fix a foundation before we put a superstructure, we are beginning to see some fundamentals looking a little bit better. This is not to take away the point that the government should address issues of welfare with more urgency. If you administer a surgery on a patient, and the patient was in pain, you have to do something to mitigate the pain. I admit that should happen. But that process is something we cannot avoid.
“We are beginning to turn the corner. The airlines that left, are they not coming back? If you pay them enough, they can convert their naira into dollar. That is why many of them are back. And some businesses, some of them are also coming back. But the initial shock was much, both for businesses and for citizens”.
Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, said the economy had exited the risk zone of the last two years and entered a recovery phase.
He said this week’s decision by the Central Bank of Nigeria (CBN) to start monetary easing phase was signal to the emerging strong fundamentals of the economy.
He noted that inflation has been falling for eight of the last nine months and could drop to government’s 15 per cent target by December, driven largely by stable exchange rates supported by reserves above $43 billion.
“There is no disconnect between Monetary Policy Committee’s easing and the inflation trend. What we are seeing is not paper improvement. Companies are returning to profitability and some states are adjusting wages and investing in jobs. That is how recovery spreads to ordinary Nigerians,” Teriba said.
According to him, the real game changers are the reserves as Nigeria has moved from under $10 billion in 2023 to more than $43 billion this year.
“That kind of boost is what stabilises the exchange rate, strengthens the currency, and eventually brings prices down,” Teriba said.
Investment banker and economist, Adetilewa Adebajo described the economy as being at “half time” — having stabilised after turbulence but yet to achieve the growth targets set out by the President’s Renewed Hope agenda.
He said stronger policy coordination is beginning to show with better alignment between fiscal and monetary policy, which was missing.
“The government has cut back on reckless Ways and Means financing. The Central Bank has imposed stricter controls on commercial banks. These are necessary steps if we want a disciplined economy,” Adebajo said.
He said inflation could fall further if the disciplined approach to governance is sustained.
He said: “If we can get inflation down to 12 per cent, Nigeria has the capacity to grow above eight per cent consistently. The resources are there, the people are there, the opportunities are there. What is needed is sustained reform, curbing government spending and staying the course”.
Analysts at CardinalStone said this week’s cut in benchmark interest rate by 50 basis points to 27 per cent by the CBN was hinged on the sustained moderation in inflation backed by relatively stable energy prices as well as the absence of major food-related shocks.
“Price pressures have also eased on account of currency appreciation, with the naira gaining 2.8 per cent this year, reflecting stronger macroeconomic fundamentals. These improvements have been reinforced by a healthy current account surplus of $8.2 billion in first half 2025, rising foreign capital inflows, and a build-up in external reserves to $43.1 billion—equivalent to 8.3 months of import cover,” CardinalStone said.
Teriba added that Nigerians should not underestimate the significance of the turnaround in the economy.
He said: “In 2023, we were in a risk phase where uncertainty and instability defined everything. By the end of 2024, we had crossed that threshold. The economy has stabilised. The recovery is here. The only question is how fast it filters into the pockets of ordinary people”.
He cited evidence from corporate boardrooms to back his optimism.
“The telecoms sector has returned to growth. Cement companies that were bleeding last year are now reporting profits. Pharmaceutical firms are bouncing back. Even banks that took heavy FX-related losses in 2023 have swung back to profitability in 2024. These are signs you cannot ignore,” Teriba said.
According to him, states are also showing signs of revival.
He said: “Enugu State has done across-board wage adjustments. Akwa Ibom and Kaduna are rolling out transport infrastructure that is creating jobs. These are the green shoots of recovery at the subnational level, and if replicated nationwide, the impact on ordinary Nigerians will be more visible”.
Excerpts from the Yusuf’s presentation on “Factfile”
On reform pains and gains
Well, first of all, let me say up front that I understand the pains and the anger of the people generally, particularly those at the bottom of the pyramid, particularly those who are fixed-income earners, those whose incomes have not adjusted properly to the inflationary trend.
I understand the pains and I understand the anger. But the issue is that when a system is already broken, to fix a system that is broken is a very, very challenging thing. And when you are trying to fix the system, a broken system, fundamentally broken, I must say, it causes a lot of pain.
At the time those reforms were being put in place, our external position, which is our foreign reserves and all of that, was less than $5 billion. Imagine a country of over 200 million people with $5 billion net reserves. We already gotten to a situation where our corresponding banks were being blocked. They were not creditworthy anymore. I interact a lot with businesses. This will not be obvious to the ordinary people on the street. But when you want to import anything, you open a Letter of Credit. The banks here will confirm, they will send the goods, the bank here will pay. But because there was no liquidity in the foreign exchange market, Nigerian banks could not pay the corresponding banks. So, they were not honouring our Letters of Credit anymore. Their lines were no longer coming to Nigeria because when you paid them in naira, they could not convert to dollars. So the system was already on the brink. That was where we were coming from. So the point I would say is that these reforms were fundamental changes, these were efforts to fix a broken system. These things normally will come with a lot of pains, but I can see that the worst of those pains is over. Things are beginning to get better. We are beginning to see recovery.
Infrastructure, SMEs, access to credit
Let’s look at organizations that have been empowering entrepreneurs, just to help boost their small businesses. Yes, the business environment has not been too friendly, and it’s still not too friendly. Though things are already looking up, talking about electricity, talking about roads. What more can be done in terms of access to loans by these entrepreneurs? What more can be done? How exactly can these entrepreneurs access loans? Well, a step has been taken by the central bank. Again, the central bank has come from a position of a very tight credit condition. Again, it was an attempt to also fix a broken system. That was why the central bank had to take that very tough stance with regard to its monetary policy instruments, which led to high interest rates. Now, with the Monetary Policy Committee (MPC) meeting a few days ago, we are beginning to see a reversal of that tight monetary condition. That is why we are seeing a reduction in the Monetary Policy Rate (MPR), a reduction in the Cash Reserve Ratio (CRR). These are some of the instruments that the central bank is using to ensure that we don’t have a terrible level of inflation. But the central bank is beginning to ease that. So, we should begin to see a much better credit condition. And on top of that, the federal government has recapitalised the Bank of Agriculture (BoA), Bank of Industry (BoI) and those other development banks. They give single interest rates. They give longer-tenored funds. They can give five years. They can give up to 10 years. Those are windows of opportunity.
“And I think there are some programmes also for SMEs. Whether we are getting the best from those things is something that we can interrogate and engage the government on how best to properly ensure that we get more value from the development finance window. But outside the development finance window, the regular commercial banks, because of what the CBN has done at this monetary policy committee meeting, we are starting to see a slight deceleration in the credit condition. So, that is what it is. And let me also say, even the prices that you are talking about of food, one of your commentators also alluded to the fact that some prices are coming down. A bag of rice this time last year was close to N100,000 to N120,000. A bag of rice is now around N70,000. In some places, it is around N65,000 to N66,000. The same thing is happening with dairy. It is dropping a little. Some pharmaceutical products that are also imported, some of those things are also dropping. You must acknowledge the pockets of things that are improving. But more importantly, you should understand what the government was trying to do in the first place. It was to fix a broken system.
GDP growth, employment and citizens’ welfare
Now that the GDP, which is a reflection of the economic activity, is picking up, more businesses are coming alive. We are starting to see more jobs being created. I mean, look at what some young people are doing in the area of e-commerce, in the area of ICT, in the area of entertainment. You can’t ignore those things. Some young entrepreneurs are also doing very well. But I know that unemployment is still a big issue. But this is a very big economy. For people who are enterprising and who are able to get one or two supports, they can always find something to do, because the demand is huge for practically everything. From the demand for even the small children, the small kids, to the demand of those who are adults, there is huge demand for so many things. And if you look at the data, even the real estate, the construction, some of those sectors are also not doing badly.
Subsidy removal and state of infrastructure
Well, I know that a lot of savings has been made. And that is why we look at the budget of both the federal and the states. Those budget numbers have increased. Although we also need to be careful because the value of what N1 million can buy two years ago is not the same thing as what N1 million can buy today. So in nominal terms, those revenues have increased. And in fairness, if you look around the states, quite a lot is happening. And for the federal government, of course the federal government have been doing a lot in terms of infrastructure and all of that. But the point is that the deficit is huge.
So it will take time for you to even notice some of those investments in infrastructure. There are roads that have been constructed by the state governments, by the federal government. I mean, we are here in Lagos, we can see what our government is doing. And it is partly because of the revenue that has been realised.
“And it’s also the reform that has made it possible for Dangote to begin what it is doing. Before now, we were spending almost $15 billion dollars to import petroleum products. That is beginning to change. That is also something. Now, Dangote is even exporting even to Europe, to America. These are stories that are changing the narrative. But the impact cannot be that immediate. Because we are talking of a system that has been dysfunctional for over two decades. Can it be fixed in two years? No! I’m not holding brief for them, but that is my own view. So we are on course as far as I’m concerned.
And we need to also set our priorities right. And we must also advise government. Because sometimes when you look at the structure of spending, that will give you some concern.
Forex stability and impact on economy
It has improved productivity. It has improved what we call investors’ confidence. It has improved planning. Because it was these investors that had interfaced more directly with some of these macroeconomic issues, not the ordinary man. What the ordinary man sees on the street is the outcome. But those who are in businesses will tell you that they can do business with better certainty now than before. They can plan better. So, investors’ confidence is improving.
What we need to work on now is consumer confidence. So that all these complaints can begin to dissipate. So that is why the government needs to focus more on how to elevate the level of consumer confidence. You know, to give them confidence that yes, things are getting better, prices are coming down. That should be the next phase of what the government should be looking at after stabilising the macroeconomic environment.