The Nigerian Economic Summit Group (NESG) says Nigeria’s macroeconomic environment has moved from a phase of intense economic adjustment in 2024 toward gradual stabilisation in 2025, following a series of reforms introduced by the Federal Government.
In its Macroeconomic Condition Monitor report, the NESG stated that policy measures implemented between 2023 and 2024 — including exchange rate liberalisation, petrol subsidy removal, monetary tightening, and fiscal restructuring — initially intensified macroeconomic pressures across the country.
“However, recent data indicate that these reforms are beginning to moderate systemic imbalances,” the group stated.
According to the report, while the economy is showing signs of improvement, the pace of recovery remains uneven, with persistent vulnerabilities in the fiscal and real sectors continuing to weigh on broader economic stability.
The group revealed that Nigeria’s Macroeconomic Condition Index (MCI) dropped to -3.0 points in 2024, its weakest level in decades, reflecting rising inflation, mounting fiscal stress, and sustained exchange rate depreciation.
NESG said the deterioration was widespread across key sectors of the economy. The Real Sector Index (RSI) stood at -3.8 points, the Fiscal Sector Index (FSI) declined sharply to -6.8 points, the External Sector Index (ESI) was recorded at -1.7 points, while the Monetary and Financial Sector Index (MSI) remained slightly positive at +0.4 points.
“The broad deterioration highlights reform-induced adjustment, exposing deep structural weaknesses and pushing macroeconomic conditions to their weakest point in recent history,” the report noted.
Despite the difficult conditions recorded in 2024, the NESG said 2025 data now point to a gradual improvement in macroeconomic conditions, with the MCI improving from -3.0 points in 2024 to -2.0 points in 2025.
The report showed that the index improved steadily throughout the year, rising from -2.9 points in the first quarter to -2.0 points by the fourth quarter, indicating that macroeconomic pressures are gradually easing.
According to the NESG, the strongest recovery came from the external sector, where the ESI improved significantly from -1.7 points in 2024 to positive territory by the third quarter of 2025 at +0.3 points, before strengthening further to +0.9 points in Q4 2025.
“This reflects increasing exchange rate stability, which helped restore some confidence in the macroeconomic environment, improving capital flow dynamics and current account surplus,” the group said.
The real sector also recorded modest improvement, with the RSI rising from -3.8 points in 2024 to -2.2 points in 2025, suggesting a gradual easing of inflationary pressures alongside slight improvements in output conditions.
However, the NESG cautioned that the index remains negative, indicating that productivity constraints and rising operational costs continue to slow recovery.
In contrast, the report identified the fiscal sector as the weakest area of the economy. According to the NESG, the Fiscal Sector Index worsened from -6.8 points in 2024 to -7.5 points during the first half of 2025 before improving marginally to -7.1 points in the second half of the year.
The group attributed the weak fiscal performance to sustained debt-servicing pressures and limited fiscal space, describing Nigeria’s fiscal challenges as deeply structural.
Meanwhile, the Monetary and Financial Sector Index remained broadly stable, holding at +0.4 points during the first half of 2025 before strengthening slightly to +0.5 points in the third and fourth quarters.
NESG said the stability reflects continued efforts to strengthen monetary policy credibility and maintain resilience within the financial system, although high borrowing costs still limit growth in the real economy.
The group concluded that Nigeria’s 2025 economic trajectory signals a transition from severe macroeconomic stress toward early stabilisation, driven largely by external sector adjustments and gradual improvements in the real economy.
However, it warned that persistent fiscal vulnerabilities and weak real sector conditions show that the recovery process remains fragile and incomplete.
NESG called for stronger policies aimed at improving domestic revenue generation, enhancing fiscal efficiency, easing inflationary pressures, and boosting productivity to sustain long-term macroeconomic stability.
