Nigeria’s economy has shown early signs of recovery following the removal of fuel subsidies, with non-oil exports driving growth, according to new policy data.
Nigeria introduced crude oil as a social product in 1973, fixing domestic prices below international levels. At that time, crude oil was sold locally at $1.93 per barrel, while the global price stood at $3.00, with a subsidy element of per cent. By 1980, the gap had widened to 65.5 per cent, and when oil prices dropped to $15.11 in 1988, the subsidy element reached 86.8 per cent.
A 2024 BBC commentary said Nigeria was suffering from a “resource curse,” with oil wealth concentrated in few hands, neglect of agriculture and manufacturing, and weak human capital.
President Bola Tinubu, elected in May 2023, ended the subsidy, removed the currency peg and unified exchange rates. The reforms triggered inflation, which peaked at 34.20 percent in June 2024, while consumption fell by -42.28 percent in the first quarter and -61.18 percent in the second quarter of 2024 compared with the same period a year earlier
Consumer goods companies reported heavy losses. Seven listed firms, including BUA Foods, Nestlé Nigeria and Nigerian Breweries, lost N418 billion in the first quarter of 2024. Over two years, losses amounted to N867 billion as currency depreciation weakened company results.
By early 2025, however, non-oil exports began to stabilise the economy. Export earnings rose 65 per cent year-on-year in the first quarter of 2025 to N1.7 trillion. Agriculture’s share of total exports increased to 8.3 per cent. Imports of agricultural goods fell, leaving a surplus of N668.3 billion.
Nigeria exported 663 million metric tonnes of goods to 11 ECOWAS countries in the first half of 2025. Exports also reached 21 African states under the African Continental Free Trade Area framework.
The external position improved. The country recorded a current account surplus of $3.73 billion in the first quarter of 2025, following $6.83 billion in 2024. This reversed deficits of more than $3 billion in each of the two previous years.
The reforms boosted investor confidence. Equity transactions on the Nigerian Exchange reached N6 trillion between January and July 2025, compared with N3 trillion in the whole of 2024. The All-Share Index gained 37.25 per cent year-to-date, lifting market capitalisation to N89.37 trillion.
Consumer goods firms also returned to profit. In the first quarter of 2025, seven major companies reported a combined pre-tax profit of N289.8 billion, followed by N264 billion in the second quarter.
Inflation slowed to 21.88 per cent in July 2025, from 34.80 per cent in December 2024. The Central Bank kept its policy rate at 27.50 per cent, while the naira stabilised between N1,501 and N1,530 per dollar.
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