Nigeria's economy continues to face significant headwinds despite government reforms and promises of recovery. For millions of citizens, the path to economic stability remains challenging as persistent issues like inflation, unemployment, and infrastructure deficits continue to impact daily life.
Major Economic Challenges and Practical Solutions
According to Professor Evans Osabuohien, an economics expert at Covenant University, Nigeria requires stable power supply and transparent governance to achieve sustainable economic growth. The country's economic landscape reveals multiple interconnected problems that demand urgent attention and strategic solutions.
Inflation, Debt and Foreign Exchange Crisis
Despite a modest slowdown, inflation continues to maintain food, transport, and basic living expenses at painfully high levels for most households. Official data shows that headline inflation eased to 16.05% in October 2025, marking the seventh consecutive month of decline. However, this minor improvement offers little relief as real wages and purchasing power continue to deteriorate.
Nigeria's total public debt climbed to ₦149.38 trillion in Q1 2025, representing a 22.38% increase from the previous year. The Central Bank's unification of the foreign exchange market in 2024, while intended to improve transparency and attract investment, triggered significant naira depreciation that crossed ₦1,500 per dollar before stabilizing in mid-2025.
Potential solutions include strengthening social protection programs, encouraging savings through inflation-indexed instruments, and pursuing debt restructuring proposals with international lenders like the IMF.
Power Supply and Infrastructure Deficits
The chronic electricity shortage remains one of Nigeria's most persistent economic bottlenecks. Despite ongoing reforms, power generation fluctuates between 3,500 and 5,500 megawatts for a population exceeding 220 million people. The Electricity Act 2023, which decentralized power generation and distribution, represents progress but inconsistent regulation and weak transmission infrastructure continue to hinder expansion.
Professor Osabuohien emphasizes that infrastructure development should take priority over temporary palliatives. "If Nigerians can have a power supply and have good roads, we could see a lot of economic impact from economic activities that will lead to productivity," he stated.
Unemployment and Human Capital Development
Unemployment remains a major drag on Nigeria's economic growth and social wellbeing. While official records show the national unemployment rate at 4.3% in mid-2024, analysts warn this figure masks significant underemployment and informal work. The International Labour Organization reports that youth unemployment stands at 6.5% while informal employment accounts for 93% of all jobs.
Human capital development suffers from inadequate investment, with only about ₦3.52 trillion (7% of total budget) allocated to education in the 2025 federal budget. This falls far below UNESCO's recommended benchmark of 15-20% for developing countries.
Corruption and Governance Issues
Corruption continues to constrain Nigeria's economic development, weakening public trust and diverting resources. Transparency International's 2024 Corruption Perceptions Index gave Nigeria a score of 26/100, ranking the country 140th out of 180 nations. The Economic and Financial Crimes Commission recovered nearly $500 million in 2024 alone, but structural reforms remain weak.
Solutions include allowing anti-corruption agencies to conduct investigations without political influence, rewarding citizens who refuse and report bribes, and promoting transparency in public procurement processes.
Security Challenges and Economic Impact
Crime and terrorism significantly impede Nigeria's economic growth and social stability. Travel advisory data indicates that the risk of terrorist attacks and kidnapping remains high across multiple states. The economic costs are substantial, affecting agricultural output, trade routes, investment flows, and public confidence.
Security solutions should focus on intelligence-led policing, community-based early warning systems, and rehabilitation programs for victims of terrorism and banditry.
The Path Forward for Nigeria's Economy
Professor Osabuohien advocates for transparent public-private-people partnerships (PPPPs) to unlock local and diaspora investment. "Nigerians at home and abroad are willing to contribute to the process if they see a transparent process," he explained. Such investments would create multiplier effects across the economy, boosting production, manufacturing, job creation, and price stability.
The expert emphasizes that focusing on fundamental infrastructure like power and transport systems would have far-reaching positive effects, reducing transport costs, impacting food inflation, and addressing food security concerns.
