As the year 2025 comes to a close in Nigeria, it has a perpetually under-construction feel to it. Reforms are all around (new laws, new policies, new slogans), but it still feels like the dream renovation is in limbo to many Nigerian citizens as they watch their costs remain high and their income stagnant.
The Nigerian federal government dubbed the fiscal plan for 2025 the “Budget of Restoration.” At ₦54.99 trillion, it was the country’s largest budget at that time, aimed at stabilizing an economy that had been destabilized by the removal of the fuel subsidy, the fluctuating naira, and an economy that had been propped up by debts. From the corridors of politics in Abuja and Washington, the numbers point to progress. But from the market stalls in Ibadan, the farms in Benue, and the sidewalks of Lagos, the narrative is far more complicated.
For the Centre for Convention on Democratic Integrity’s (CCDI) perspective, as an organisation that operates among communities locally and engages other actors internationally, the divide between reform and reality remains the largest challenge faced by Nigeria.
Three policy agendas characterized 2025: radical tax policies, a renewable energy shift, and strict monetary management. Each was successful. Each inflicted a wound.
Tax reform: Less Taxation, Greater Pressure
The government in 2025 finally put an orderly tax system in place in Nigeria by consolidating more than 60 taxes into eight. The country started off on the right foot towards an increase in VAT. A 70% windfall tax was charged on bank foreign exchange profits. Small businesses making an annual turnover of less than ₦50 million are entitled to tax relief.
The rationale was simple. The country’s revenue-to-GDP ratio is one of the lowest globally, and debt servicing alone swallowed over ₦16 trillion in 2025. The government required funds to carry on.
However, this respite was also a reality for some small businesses. But as far as the middle class was concerned, the salaried employee, and the trader operating within the formal sector, the pressure mounted. This is because more efficient tax collection meant fewer places to hide, even as inflation was above 25 percent. The banks, in turn, adjusted levies and tightened credit.
The real problem is not just “money in the system”, trust is at stake as well. Looking at taxes as punishment rather than as a form of participation is very prevalent in Nigeria. Paying taxes when light, security, and healthcare are not guaranteed is like paying rent in a house when it is apparent that it is sinking.
There has to be visibility in taxation in order for tax reform to succeed. People need to understand what their taxes will result in. The revenue raised by taxes should link to infrastructure like roads, markets, and lighted streets, such that people can point to them and say, “This is what our taxes did.”
Power and the Quiet Promise of Solar
As the national grid continued failing through 2024 and 2025, the legend of the power of the center disappeared into the norm. Injections of some 200 million dollars from the government-sponsored solar microgrids project are now lighting the rural and peri-urban areas.
CCDI’s assessment in some farming communities revealed that this was more than just theoretical. With solar-powered cold storage, post-harvest losses dwindled. Smaller processors became capable of preserving and processing their own crops. This was more than a policy discussion for most Nigerian farmers.
However, the cost scale is tragically small. For a country of over 220 million people, $200 million is a beginning, not a solution. In urban areas, being green will remain costly because of fluctuating import duties and a weak naira driving up costs.
If Nigeria is truly interested in a decentralized energy system, it might provide incentives to the owners of small businesses to turn to solar energy. Incentives may come in the forms of discounts for permits, discounts for business registration, or tax credits.
Tight Money, Tight Lives
Throughout 2025, the Central Bank maintained a firm grip: high interest rates, targeting exchange rate stability at around ₦1,500 per dollar. Inflation moderated slightly from the peaks recorded towards the end of 2024, while foreign investors approached warily.
But in the streets, credit disappeared. Where you borrow rates of interests over 30 percent, that is not entrepreneurship, it is suffocating the economy. The industries, the growers, and the exporters suffered alongside currency traders. Because when you have a rising dollar, it does not necessarily hold prices in check because of stability in naira.
No policy is universally applicable in every nook of the economy. Food sectors as well as export-oriented production ventures should not be made to suffer in the same manner as speculatory capital. Different rates of interest, loans at single-digit rates in the production sectors, and taxes on banking windfall profits can make fiscal discipline translated into growth.
The Budget Lines that Stayed Silent
At some point, apart from the large reforms, some important sectors have remained wanting. Expenditures on security are high, but farmers are still fearful of their farms. You cannot stabilize food prices when farms are war zones.
Social protection also went into decline. Cash transfers, school meals, and extension of health insurance did not match the growth in poverty. The evidence is unmistakable, over 25 million children are out of school in Nigeria, when learning has been funded just seven percent of the country’s budget.
Then, there is federalism. The increases in the national minimum wage were stuck in several states. Education and results in health care performance mean more to states than the will of the national administration. It is just a press release.
From Numbers to Lives
Yes, GDP grew. Yes, fiscal discipline improved. But stability that cannot be felt in classrooms, clinics, farms, and market stalls is not restoration, it is accounting.
Nigeria’s path forward must shift from macro-stability to micro-impact. Human capital must matter more than concrete. Diaspora engagement must go beyond remittances to real knowledge transfer, backed by credible investment guarantees. Transparency must move from speeches to dashboards Nigerians can actually check.
In 2025, Nigeria stayed the course. In 2026, the course must finally lead to the people.
The Nigerian people have endured reform. It is time for reform to reward them.
Dr. Olaleke Alao
Executive Director, Corporate Affairs, CCDI Ltd/Gte, Nigeria &
Secretary, CCDI Inc, Maryland, USA
