By Ibukun Emiola
Ibadan, Dec. 27, 2025 (NAN) – Nigeria’s economic narrative in 2025 was one of cautious stabilisation, a fragile equilibrium achieved through decisive government policy interventions. While headline indicators showed improvement, the lived reality for millions of households and Micro, Small, and Medium Enterprises (MSMEs) remained a daily battle against elevated costs, painting a complex picture of macroeconomic progress meeting microeconomic strain.
The News Agency of Nigeria (NAN) reports that after a period of significant volatility, targeted government reforms began to anchor key economic metrics. This policy-driven stabilisation was most visible in three areas: a return to moderate Gross Domestic Product (GDP) growth, a firmer fiscal position, and a rebuilding of external reserves. These are foundational elements for long-term investment, yet their benefits often take time to filter down to the grassroots.
Real GDP is estimated to have expanded by approximately four per cent for the year. This growth was dual-engine driven: firstly, by increased oil production following security and investment measures in the Niger Delta, and secondly, by a strengthened non-oil sector—specifically agriculture, services, and upstream petroleum activities. The latter points to the success of reforms aimed at boosting productivity and attracting domestic investment. The second quarter was particularly robust, with growth exceeding four per cent year-on-year, suggesting momentum was building in these targeted sectors.
International validation of Nigeria’s policy direction came from institutions like the International Monetary Fund (IMF), which revised its growth projection upward to nearly four per cent. The IMF cited improved investor confidence stemming from two of the government’s most consequential—and painful—reforms: the exchange-rate realignment and the removal of the costly petrol subsidy. While these measures are designed to correct long-term structural imbalances and free up fiscal space, their immediate effect has been a sharp increase in the cost of living and business operations. Development partners have concurrently noted improvements in government revenues and external reserves, crediting ongoing fiscal discipline for creating a more stable budgetary framework.
However, this macroeconomic stabilisation exists in stark contrast to the ground-level challenges. Inflation, though potentially moderating from peak levels, and soaring operating costs continued to squeeze households and businesses, underscoring that policy reforms are a starting point, not a complete solution. The critical need is for these reforms to translate into tangible support mechanisms.
Dr. Femi Egbesola, National President of the Association of Small Business Owners of Nigeria (ASBON), encapsulated this dichotomy, describing 2025 as “one of the most difficult years in the history of business owners.” He detailed a brutal trifecta: “The combined impact of inflation, insecurity, and unstable fiscal policies forced many enterprises into survival mode. Poverty increased, joblessness increased, insecurity increased. Infrastructure went from bad to worse.”
Despite the strain, a thread of resilience and adaptation emerged. Egbesola noted a “cautious optimism” among small businesses, predicated on the hope that the emerging “stability in fiscal policy” will be consolidated. He highlighted a strategic pivot by forward-looking MSMEs: “MSMEs are shifting focus towards self-driven solutions, export expansion and technology-driven innovation to remain competitive in global markets.” He pointed to a potential silver lining in currency depreciation: “Because our currency is devalued, Nigerian products are cheaper in the global market. We can export more, attract customers and bring in foreign exchange.” This represents a crucial mindset shift from relying solely on the domestic market to seeking growth through international trade.
In the manufacturing sector, the challenges are intensely practical. Mrs. Omotunde Ayankoya, Oyo State Chairperson of the Nigerian Association of Small and Medium Enterprises (NASME) and a producer of black soaps, highlighted how high production and logistics costs erode viability: “What we buy as peanuts becomes expensive after logistics. At the end of the day, getting even five or 10 per cent profit is a big problem.” Her call for action is specific: stronger support for local production clusters and improved transport systems to directly ease these cost pressures.
Ayankoya also offered prudent advice for new entrepreneurs, advocating for a bootstrap approach: “Start with family capital. Loans should come when the business has taken shape.” This underscores the importance of achieving product-market fit and basic operational stability before taking on debt. She acknowledged, however, that recent government and financial sector initiatives are creating better pathways for formal financing, which will be essential for scaling established businesses.
In conclusion, 2025 was a year of economic recalibration for Nigeria. Government-led reforms laid a necessary foundation for stability, earning international credit and improving macro-indicators. Yet, for the MSMEs that form the economy’s backbone, the year was defined by severe cost pressures. The path forward in 2026 hinges on a dual focus: the government must consolidate its reform agenda while aggressively deploying targeted, sector-specific support—such as improving logistics corridors, providing technology adoption grants, and facilitating export market access—to ensure the emerging macroeconomic stability translates into microeconomic survival and growth.
(NAN) (www.nannews.ng)
IBK/AWA
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Edited by Olawunmi Ashafa
