Nigeria @ 65: Inflation, Insecurity, Policy Instability Still Threaten Growth

As Nigeria commemorates its 65th independence anniversary, private sector leaders and economic experts have cautioned that the nation’s abundant resources and demographic strength remain underutilized, warning that persistent inflation, insecurity, and policy inconsistency continue to stifle growth.

While recent reforms and modest improvements in macroeconomic indicators have sparked cautious optimism, stakeholders argue that only bold governance reforms, sustained private sector collaboration, and heavy investment in infrastructure can reposition the country on a path of sustainable development.

The Lagos Chamber of Commerce and Industry (LCCI) noted that the economy has shown signs of renewed momentum, citing 4.23 per cent GDP growth in the second quarter, a slight easing of inflation to 20.12 per cent, an appreciating naira trading below N1,500/$, and foreign reserves rising above $42bn. Monetary authorities recently cut the policy rate to 27 per cent after months of hikes, while sweeping tax reforms are underway.

“These are positive signals that create a more promising business climate,” said President of LCCI, Gabriel Idahosa. “But optimism must be tempered with realism. High costs of doing business, infrastructure gaps, and policy uncertainty remain major impediments to private sector productivity.”

He urged government to provide transparent guidance on the implementation of new tax laws set to take effect in 2026, arguing that predictability and consistency are essential for long-term investment planning.

Private Sector Prescriptions for Growth

At the heart of the private sector’s call is a demand for structural reforms that address Nigeria’s longstanding bottlenecks. Business leaders emphasized that stabilizing power supply, reducing borrowing costs, and investing in logistics and broadband are crucial to unlocking productivity across industries.

The LCCI further called for the acceleration of industrialization policies such as the 30 per cent Value-Addition Export Bill and the “Nigeria First” executive order to promote local manufacturing. According to Idahosa, strengthening local content in oil and gas projects could help convert export gains into domestic jobs and industrial growth.

“SMEs and startups must be given breathing space under the new tax framework,” he added. “They are the backbone of our economy, and their survival is tied to transparent, fair, and equitable regulation.”

For many analysts, Nigeria’s economic stagnation cannot be divorced from its governance challenges. Group Managing Director of Crane Securities Limited, Mike Eze, described Nigeria as “a paradox of potential without progress.”

“We are blessed with abundant natural resources and a youthful population, yet our people struggle with poverty and unemployment,” he said. “To unlock our potential, we must prioritize governance reforms, unity, and equitable opportunities. Without security and accountability, every reform effort will be undermined.”

Eze called for large-scale investment in youth empowerment, arguing that Nigeria’s 200 million people, 60 per cent of whom are under 40, represent the nation’s most valuable growth engine.

“Digital literacy, entrepreneurship, and vocational training aligned with market needs will prepare young people to drive innovation and competitiveness in the global economy,” he said.

Director of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stressed the urgency of restoring currency stability, which he said has been battered by decades of poor monetary management. He recalled that in the 1970s, the naira was stronger than the U.S. dollar, but by 2024 it had plunged to ₦1,600/$, eroding purchasing power and raising production costs.

“Persistent macroeconomic instability has discouraged investment and worsened poverty levels,” Yusuf said. “Going forward, policy must focus on expanding non-oil exports, plugging fiscal leakages, improving spending efficiency, and raising non-oil revenue without crippling the private sector.”

He added that the recent steps toward exchange rate unification and subsidy removal must be complemented by targeted social safety nets, cash transfers, food interventions, and job creation programs to shield vulnerable households and maintain reform momentum.

Lessons from Other Nations

Shareholders and market watchers expressed frustration at Nigeria’s slow pace compared to peers.

President of the New Dimension Shareholders Association (NDSA), Patrick Ajudua, said Nigeria has lagged behind smaller economies like Madagascar, which now exports palm oil, a product it once imported from Nigeria.

“Look at Rwanda and Angola, countries once ravaged by conflict now attracting global investors,” Ajudua said. “They succeeded because of political stability, consistent policy, and visionary leadership. Nigeria must learn that without security, no investor will commit long-term capital.”

He stressed that insecurity has crippled agriculture and manufacturing, forcing businesses to close and farmers to abandon their fields. “No economy can thrive when citizens cannot farm, and companies cannot plan,” he warned.

Looking ahead, private sector leaders and economic experts insist that Nigeria’s path to prosperity must be anchored on security, governance, infrastructure, youth empowerment, and policy consistency. They argue that without addressing these interwoven issues, the country risks missing another generation of opportunities.

Security, they emphasized, is the bedrock of development. Unless farmers can return to their fields without fear and manufacturers can operate without disruptions from banditry or unrest, no amount of policy reform will yield lasting impact. Investors, both domestic and foreign, require a safe environment to commit long-term capital, and the agricultural sector in particular cannot thrive under conditions of persistent violence.

Equally critical is the reform of governance. Analysts maintain that transparent institutions, accountable leadership, and a credible rule of law are indispensable for building investor confidence and restoring public trust. Policy instability and regulatory flip-flops, they said, have repeatedly undermined Nigeria’s growth potential. A clear, consistent, and predictable policy environment is essential to attract investment and stimulate private enterprise.

Infrastructure development also stands out as a decisive factor for transformation. Leaders across sectors highlighted the urgent need for reliable power, efficient transport systems, and expanded broadband connectivity.

These, they explained, are not luxuries but critical enablers of industrialization, digital transformation, and competitiveness in a globalized economy. Without them, the cost of doing business will remain prohibitively high, driving industries and jobs away from Nigeria.

Experts further underscored the central role of youth empowerment. With more than half of its population under 40, Nigeria’s future rests on its ability to harness the creativity and energy of its young citizens.

Expanding access to quality education, vocational training, digital skills, and entrepreneurship opportunities will equip them to drive innovation and contribute meaningfully to national growth. Empowered youth, they said, will not only boost productivity but also strengthen democratic participation and social stability.

Policy consistency was highlighted as the glue that holds reform together. Frequent changes in tax regimes, monetary frameworks, and foreign exchange rules have created uncertainty that discourages planning and investment.

The experts urged the government to commit to stable, transparent, and long-term policies that give businesses the confidence to invest, expand, and innovate.

Together, these priorities form a roadmap that, if pursued with discipline and urgency, could transform Nigeria’s economy. As stakeholders noted, the country has shown resilience and flashes of progress, but its true potential can only be unlocked if leadership delivers security, reforms, and an enabling environment where enterprise can flourish.