NIGERIA’S ECONOMY AT 65: RENEWED MOMENTUM AND CAUTIOUS OPTIMISM

As Nigeria celebrates 65 years of independence, the Lagos Chamber of Commerce and Industry (LCCI) extends warm felicitations to the government and people of Nigeria. This milestone offers not only a moment of celebration but also a sober reflection on the state of our economy, the business environment, and the need for sustained reforms required to unlock our nation’s full potential. Examining major macroeconomic indicators, we observe a renewed momentum that is fostering cautious optimism about the economy.

State of the Economy

Key indicators are showing some positive trends worth highlighting. Economic growth is accelerating, with the second quarter GDP growth rate at 4.23 percent. Productivity in the oil and gas sector is recovering. Headline inflation, while still elevated, has eased to 20.12 percent as of August. Tthe Naira exchange rate is appreciating and trending below the psychological N1500/USD mark. External reserves have strengthened to above $42 billion.  For the first time since 2020, the monetary policy authorities eased rates to 27 percent after several hikes due to spiralling inflationary pressures. Significant tax reforms are underway. These developments create a cautiously optimistic business climate.  One that offers opportunity but demands sustained policy discipline and private-sector agility.

This macroeconomic backdrop presents both opportunities and challenges for the business community. Exporters and manufacturers can take advantage of more substantial reserves and a relatively stable naira to secure inputs and plan foreign-exchange exposures with greater certainty. Energy-related firms, ranging from logistics providers to service providers, are well-positioned to benefit from the oil industry’s renewed activity. At the same time, inflation remains high enough to squeeze consumer purchasing power and margins, while the transition to new tax rules will temporarily increase compliance costs and require careful cash-flow planning.

The Chamber urges the government to ensure a transparent and phased rollout of the new tax framework, providing clear guidance that reduces uncertainty for investors. Fiscal measures targeting critical inputs, in line with prudent monetary policy, can accelerate the disinflation trend without undermining reserves. Policies that strengthen local content in oil-sector projects will help translate export gains into jobs and industrial development. Meanwhile, the Central Bank should continue to maintain open communication on foreign-exchange policy to sustain market stability.

The Way Forward

At 65, Nigeria stands at a pivotal juncture. The Chamber calls for:

1. Deepening structural reforms that ease the cost of doing business. With the benchmark rate still as high as 27%, weak power supply, high energy costs, and an expensive exchange rate for critical imports, businesses are operating in a harsh business environment.
2. Prioritizing infrastructure investments, particularly in power, logistics, and broadband. We need critical infrastructure upgrades to support innovation, digital transformation, and industrialization.
3. Accelerating industrialization policies that boost local manufacturing and exports. We expect to see the implementation of the 30% Value-Addition Export Bill, passed by the National Assembly, and the Executive Order on Nigeria First Policy, to boost local manufacturing.
4. Enhancing policy consistency and regulatory compliance to build investor confidence. The oil and gas sector is critical to Nigeria’s foreign exchange revenue. Unfortunately, we have not been able to have the deregulated oil and gas industry as provided in the Petroleum Industry Act. The current levels of uncertainty and controversy in the oil and gas industry are enough to delay  some potential foreign investors if not urgently resolved.
5. Supporting SMEs and startups as the backbone of economic transformation. We commend the considerations given to SMEs in the new tax laws commencing January 2026. We urge the government to drive the implementation of the new law with transparent regulatory systems, a fair and equitable tax system, and a continued focus on the real economy.

Conclusion

As we celebrate 65 years of nationhood, the Lagos Chamber of Commerce & Industry reaffirms its commitment to constructive advocacy, partnerships, and thought leadership in advancing Nigeria’s economic transformation. We remain confident that, with sustained reforms and collaborative efforts between the public and private sectors, Nigeria can unlock its immense potential and secure a prosperous future for its people.

Nigeria stands at an inflection point. Encouraging macroeconomic signals, including rising growth, more substantial reserves, improving oil output, and a downward trend in inflation, are visible. However, structural reforms and careful implementation remain critical.

Long live the Organised Private Sector in Nigeria

Long live the Federal Republic of Nigeria

Mr. Gabriel Idahosa, FCA

President

Lagos Chamber of Commerce & Industry

Tuesday 30th September 2025.