How Nigeria’s economic reforms are shaping daily life in 2025: Key insights and impacts

On the outskirts of Abuja, an elderly woman and her daughter run a roadside food kiosk.

Their menu is simple but practical: roasted yam, roasted plantains, and beans. It’s a popular choice among construction workers for its affordability and energy-boosting qualities. But behind this modest operation lies a deeper story of resilience and adaptation in the face of Nigeria’s sweeping economic reforms.

“I am afraid to go to the market nowadays,” the elderly woman said. “Because if you buy [these plantains], you might not see your money back if care is not taken.”

Her words reflect the growing challenge for small-scale entrepreneurs: the rising cost of inputs versus what customers can afford to pay. On a subsequent visit, plantains were missing from the menu. “She is not around,” her daughter explained, revealing that plantains are only sold when the mother is present to personally supervise sales and ensure profits aren’t undercut.

This anecdote encapsulates the human side of Nigeria’s economic reforms—policies designed to stabilize the economy but which have introduced new complexities for everyday Nigerians.

The naira: Stabilization amid turbulence

Nigeria’s foreign exchange market liberalization in 2023 led to a sharp depreciation of the naira, which lost over 100% of its value before stabilising at ₦1,535 per dollar by the end of 2024.

In an effort to further stabilise the currency, the Central Bank of Nigeria (CBN) has extended dollar access for foreign exchange bureaus until May 30th. This initiative allows bureaux de change (BDCs) to purchase up to $25,000 weekly from the official currency market. Since its launch in December, the programme has improved liquidity, contributing to a 1.8% appreciation of the naira. As of February 12, the currency traded officially at ₦1,507 per dollar.

For households and businesses alike, a stronger naira could bring relief by lowering import costs for essentials like food and fuel. However, inflation—currently at 34.8%—continues to erode purchasing power, leaving many Nigerians struggling to make ends meet.

Fuel subsidy removal: a necessary trade-off

In mid-2023, President Bola Tinubu’s administration removed fuel subsidies—a move widely regarded as necessary but which has significantly impacted daily life. Petrol prices surged nearly 500%, driving up transportation costs and squeezing household budgets further.

While this reform freed up $10.7 billion annually for government spending on infrastructure and social programmes, its immediate effects have been harsh on low-income households that rely heavily on affordable transport options. For small businesses like the food kiosk just outside Abuja, higher transport costs mean higher input costs—further straining profitability.

Inflation’s grip on daily life

Food prices have soared due to currency depreciation, supply chain disruptions, and climate-related factors. Over 33 million Nigerians are now food insecure, according to the World Food Programme (WFP). For many families, inflation has forced difficult trade-offs between food, healthcare, education, and housing expenses.

The story of Abuja’s roadside food vendor highlights this reality. Rising costs have made it increasingly difficult for small entrepreneurs to maintain profitability without passing on higher prices to customers—many of whom are already stretched thin.

Opportunities amid challenges

Despite these difficulties, Nigeria’s economic outlook holds promise if reforms are sustained effectively. The Nigerian Economic Summit Group (NESG) forecasts GDP growth reaching as high as 5.5% by 2025, contingent upon the implementation of stability-oriented reforms. Key sectors like agriculture and manufacturing are expected to drive growth as businesses adapt to new realities.

That said, government investments in infrastructure—including expanded broadband coverage under Nigeria’s Digital Economy Plan—could unlock opportunities for small businesses and entrepreneurs. The Nigerian Economic Summit Group (NESG) emphasizes that strategic investments in infrastructure and innovation can drive sustained high growth. This approach is considered vital for economic stabilization this year.

A look ahead

Nigeria’s economic reforms present both challenges and opportunities for its citizens. While short-term pain may persist, long-term stability hinges on effective policy implementation and sustained efforts toward diversification and inclusion.

For individuals like the roadside food vendor on the fringes of Abuja, survival hinges on adaptability—whether it’s adjusting product offerings or adopting new business practices to cope with rising costs. However, with sustained efforts toward macroeconomic stabilization—including inflation control and improved infrastructure—the outlook could improve significantly by year-end.

Ending anecdote: Resilience in action

Back at her roadside kiosk on the outskirts of Abuja, the elderly woman continues her work with quiet determination. Her daughter now handles most transactions but keeps an eye out for her mother’s return—a reminder that even in challenging times, resilience remains a defining trait of Nigerians navigating an evolving economic landscape.

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