The Nigerian economy has had its ups and downs. The nation got Independence in 1960 when its gross domestic product (GDP) was $4.20 billion and per capita income, $93.
The economy was largely undiversified at that time, with agriculture dominating. According to the Ominira Initiative, agriculture accounted for over 75 percent of foreign exchange (FX) earnings, 68 percent of GDP, and created employment opportunities for about 65 percent of the population.
By the late 1970s, the real job of diversification began. Oil sector contribution to the GDP moved from 3 percent to 30 percent of GDP, with oil exports accounting for 96 percent of total exports.
The nation’s entry into OPEC in 1971 marked the beginning of humongous transformation. In a World Bank report, Brian Pinto, an expert on economy, said the oil price shocks of 1973-74 and 1979 resulted in a large transfer of wealth to Nigeria, with public expenditure rising, as did the country's access to international capital markets.
However, as oil revenues surged, agriculture declined.
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“Following the collapse of oil prices in 1982 and the rise in real interest rates, Nigeria experienced rising inflation, strict rationing of foreign exchange, and the possibility of debt rescheduling. This coincided with the rise of parallel markets, so that an illegal, floating-rate parallel market coexisted with an official, fixed-rate market,” Pinto said.
Oil price collapse in the 1980s led to recession and debt crisis. The Ibrahim Babandia regime brought in the Structural Adjustment Programme (SAP). The programme, spearded by the International Monetary Fund (IMF), was characterised by currency devaluation, trade liberalisation, privatisation of state-owned firms, and removal of subsidies.
Some policy watchers believe that the era brought about Nigeria’s economic collapse, with import-led policies resulting in factory shutdowns and job losses.
The return of democracy in 1999 brought in Olusegun Obasanjo, who achieved debt rescheduling and repayment. A total debt of $30 billion was forgiven by the Paris Club (2005–2006). Banking sector consolidation (2004) strengthened financial institutions, and reforms were visible in insurance and telecoms.
The GDP growth averaged 6 percent–7 percent during the 2000s, driven by oil, telecoms, and banking.
Oil remained over 90 percent of export earnings.
Between 2007 and 2014, non-oil sectors such as telecoms, entertainment (Nollywood, music), and services grew.
Agriculture rebounded but not enough to end food imports. The economy was also rebased to reflect changes in various sectors.
From 2014 to 2016, oil prices crashed, leading to recession in 2016. There were FX shortages, rising inflation, and unemployment.
The COVID-19 pandemic came in 2020 and led to recession. However, there was a cacophony of controversial policies, led by border closure, import restriction, command and control pronouncements as well as FX rationing.
But the current Bola Tinubu administration cane in 2023 and liberalised the FX market, removing petrol subsidies. However, this has led to naira depreciation by over 60 percent. The citizens are struggling to make ends meet due to skyrocketing prices. The start of Dangote Petroleum Refinery has slashed petrol imports and ended an era of scarcity. Naira is now stable, thanks to the central bank’s set of policies.
Tinubu says economy has turned the corner
In his Independence Day speech on Wednesday, President Bola Tinubu said the economy has turned the corner.
“I am pleased to report that we have finally turned the corner. The worst is over, I say. Yesterday’s pains are giving way to relief. I salute your endurance, support, and understanding. I will continue to work for you and justify the confidence you reposed in me to steer the ship of our nation to a safe harbour.
“Under our leadership, our economy is recovering fast, and the reforms we started over two years ago are delivering tangible results. The second quarter 2025 Gross Domestic Product grew by
4.23 percent—Nigeria’s fastest pace in four years—and outpaced the 3.4 per cent projected by the International Monetary Fund. Inflation declined to
20.12 percent in August 2025, the lowest level in three years. The administration is working diligently to boost agricultural production and ensure food security, reducing food costs.”
Tinubu said in the last two years of his administration, the government has achieved 12 remarkable economic milestones.
“We have attained a record-breaking increase in non-oil revenue, achieving the 2025 target by August with over N20 trillion. In September 2025 alone, we raised N3.65 trillion, 411% higher than the amount raised in May 2023.
“Our debt service-to-revenue ratio has been significantly reduced from 97 percent to below 50 percent. We have paid down the infamous Ways and Means advances that threatened our economic stability and triggered inflation. Following the removal of the corrupt petroleum subsidy, we have freed up trillions of Naira for targeted investment in the real economy and social programmes for the most vulnerable, as well as all tiers of government.”
He added, “We have a stronger foreign Reserve position than three years ago.Our external reserves increased to $42.03 billion this September—the highest since 2019.”
