By Chinwendu Obienyi
Amid macro-economic challenges, Africa-focused market Intel gathering and strategic consulting firm, SBM Intelligence, has stated that Nigeria’s economy is currently undergoing a significant transition towards a more market driven framework driven by a series of bold reforms initiated since May 2023.
This is coming after business activities across the country have seen their fastest growth since 2024.
According to the latest PMI report from Stanbic IBTC Bank, the headline index increased to 53.7 in February, up from 52.0 in January, signaling a solid improvement in business conditions, with growth in output, new orders, and purchasing activity across agriculture, manufacturing, services, wholesale, and retail sectors.
New orders increased markedly, with customers more willing to commit to new projects. Inflationary pressures also moderated, with Nigeria’s inflation rate dropping from December 2024’s 34.80 per cent to 24.48 per cent in January. However, employment rose only marginally due to cost pressures.
SBM noted Nigeria’s extensive subsidy regime for years, functioning like driving on a motorway with the handbrake engaged—hampering economic efficiency and distorting market fundamentals.
“With significant reductions in fuel, electricity, and exchange rate subsidies, the economy is now adjusting to a more market-driven framework where prices of goods and services largely reflect supply and demand dynamics.
This transition has not been without pain, as consumers initially struggled with the shock of rising costs. However, inflationary pressures have begun to moderate, aided by a high base effect”, it said.
The consulting firm explained further that as inflation trended downward—from a peak of 34.8 per cent in December 2024 to 24.48 per cent in January—businesses and investors are gaining better visibility into costs and revenues.
It said this stability enhances the ability to attract long-term capital, as both government and private sector players can now model expenses with greater predictability.
However, while business activity expands, employment growth remains sluggish due to persistent cost constraints. Ultimately, these reforms are laying the groundwork for a more sustainable economic trajectory.
“While the road ahead may still present challenges, Nigeria is gradually moving towards a system where economic fundamentals—not artificial price controls—drive growth and investment decisions.
If this momentum is sustained, the country could unlock new opportunities for industrial expansion, job creation, and overall economic resilience”, SBM Intelligence concluded.