By Biyi Fadiji
Nigeria’s economy has moved beyond survival mode into a phase of structural transformation and accelerated growth. Backed by decisive monetary and fiscal reforms, the nation is witnessing renewed global confidence, stable markets, and a clear shift toward long-term sustainability.
This new wave of momentum isn’t just about recovery but reinvention. This positive trend is built upon several key pillars that collectively paint a picture of an economy regaining its footing and positioning for accelerated growth:
FX stability restores confidence
DON'T MISS
Perhaps the most striking change has been the stabilisation of the Naira. Through the Central Bank of Nigeria’s (CBN) market-reflective exchange rate policy, foreign exchange volatility has dropped sharply. The difference is measurable: non-bank companies listed on the NGX 30 saw FX losses plunge from N 670 billion to N111 billion in the first quarter of 2025.
This shift has restored confidence to both investors and corporates, signaling that the Naira now trades close to its fair market value. Businesses once burdened by erratic currency swings are finding breathing room to plan, budget, and reinvest. For the broader economy, it means more predictable pricing, stronger balance sheets, and a revived sense of trust in monetary management.
Investor inflows hit record levels
Global markets have taken notice. Foreign Portfolio Inflows (FPI) surged to $8.05 billion in the first half of 2025—almost matching the total inflows recorded for all of 2024. The spike represents a clear vote of confidence in Nigeria’s policy direction and fiscal discipline.
The renewed inflows are strengthening foreign reserves and deepening liquidity in the domestic capital markets, positioning Nigeria as one of Africa’s most attractive investment destinations. Beyond portfolio investors, strategic players in energy, manufacturing, technology, and agriculture are exploring new opportunities—spurred by improved policy clarity and a more stable macroeconomic environment.
Inflation moderates as policy tightening pays off
CBN’s firm monetary stance is also paying off.
By curbing excess liquidity and tightening policy, inflationary pressures have started to ease. Analysts now project potential rate cuts of between 50 and 100 basis points in the second half of 2025 if the trend continues.
Lower borrowing costs could further unlock private investment and credit growth, particularly in the SME sector. Businesses that once hesitated to expand are revisiting growth plans, encouraged by a more predictable cost of capital and a clearer inflation outlook.
Growth Forecast Upgraded
These shifts are feeding into stronger growth expectations. Nigeria’s GDP forecast for 2025 has been revised upward to 4.1%, supported by steady oil output, resilient telecom investments, and more stable energy prices. Agriculture and manufacturing are also gaining ground, bolstered by access to financing and improved infrastructure spending.
A New Era of Opportunity
Nigeria’s economic fundamentals are aligning for sustained progress. With improved FX stability, strong investor inflows, and credible policy management, the country stands at a pivotal moment. For investors, corporates, and global partners, the message is clear: Nigeria’s economy is not just recovering—it’s accelerating toward durable, inclusive growth.
*FADIJI, is a Treasury Analyst
The post Nigeria’s Economic Reforms: How clear monetary policy direction creates window for strategic investments appeared first on Vanguard News.
