LAGOS, June 8, 2025 — Nigeria’s economy is showing early signs of stabilisation, but millions of Nigerians remain trapped in a cost-of-living squeeze that reforms have yet to ease. That is the verdict from the Lagos Business School’s (LBS) closely-watched June 2025 Mid-Year Economic Review, presented by leading economist Bismarck Rewane.
The report paints a mixed picture. On the one hand, the macroeconomy is improving — with the naira stabilising, inflation trending down, and financial markets showing renewed strength. But on the other, household welfare remains weak, and poverty indicators remain troubling.
“Nigeria’s market is healing faster than its households,” Rewane said during the session. “We are seeing a growth without welfare scenario.”
Stabilisation at the Top
Financial markets and macro indicators have clearly improved. Headline inflation eased to 23.71% in April and is projected to fall further to around 20% by December, thanks to exchange rate stability and lower logistics costs.
The naira is now trading within 1–3% of the parallel market rate, compared to gaps of 50–70% last year. Foreign reserves have grown to $38.56 billion. Oil production, which funds about half of government revenue, rose by 5.71% in April to 1.48 million barrels per day.
The stock market is also rallying — the Nigerian Exchange is up 29% year-to-date, as investor confidence improves.
Weak Progress for Households
Yet the gains at the top of the economy have not filtered down to ordinary Nigerians. When social indicators such as poverty, education, and life expectancy are included, Nigeria’s overall score falls to just 45.75% in the LBS review.
Food prices remain volatile. Although staples like yam, rice and beans have seen recent price drops, key items such as tomatoes have doubled in price this year. The average Nigerian family still struggles to cover basic needs.
The report warns that higher government spending could fuel inflation. “Every 1% rise in fiscal deficit is likely to push inflation up by 0.15%,” Rewane cautioned.
Investment Opportunities Emerging
Despite the challenges, the report highlights several sectors where investors can find value:
• Power sector: Over 50% of demand remains unmet — a key opportunity as Nigeria modernises its grid.
• Digital economy: Already contributes over 12% of GDP, with room to grow as internet access expands.
• Agribusiness and food processing: Driven by local demand and efforts to cut food imports.
• Healthcare, fintech and logistics: Rising demand offers growth potential.
Nigeria’s telecom sector — the largest in Africa — is expected to attract a $1 billion investment in July, positioning it for further expansion.
Global Headwinds Remain
Globally, Nigeria faces risks from slowing trade, rising US tariffs, and weaker Chinese demand. Oil prices remain fragile — Brent crude is trading between $60–65 per barrel, below Nigeria’s budget benchmark of $75.
A further drop in oil prices could widen Nigeria’s fiscal deficit and weaken government finances.
Cautious Optimism for H2 2025
Looking ahead to the next two months, LBS forecasts:
• Inflation easing to around 23.15%;
• The naira stabilising between N1,600–N1,650 per dollar;
• Oil production climbing to 1.5 mbpd;
• Corporate profits improving in Q2.
The Central Bank may also cut rates by 50 basis points to support growth, while new tax reforms — including adjustments to VAT and corporate income tax — are set to take effect.
The Bottom Line
Nigeria’s macroeconomic picture is improving. The worst of the currency crisis is over, and markets are stabilising. But for most Nigerians, the recovery remains distant. Without deeper reforms that target human welfare, inequality will widen even as top-line growth improves.
“The direction is right,” Rewane concluded, “but we must now ensure that the gains reach the people.”
