Key Economic Shifts Shaping August 2025

Nigeria’s Business Pulse: Key Economic Shifts Shaping August 2025

As Nigeria navigates a complex economic landscape, four major developments dominated the business headlines on August 14, 2025. From surging energy costs to sweeping tax reforms, these stories reveal the structural shifts underway in Africa’s largest economy.

Cooking Gas Prices Surge Amid Inflation and Supply Gaps

Nigerians are grappling with a sharp rise in cooking gas prices, marking the fifth consecutive monthly increase. The average cost of refilling a 12.5kg cylinder soared to ₦21,010.56, while the 5kg refill hit ₦8,323.95. Delta and Rivers states recorded the highest prices, exceeding ₦22,000, while Yobe and Niger offered the lowest at around ₦18,500.

This spike is driven by exchange rate volatility, import dependency, and infrastructure bottlenecks. As households revert to firewood and charcoal, concerns mount over health risks and environmental degradation.

In a surprising twist, Dangote Refinery slashed its LPG price to ₦740/kg, the lowest in 2025, offering a lifeline to consumers and disrupting market dynamics.

Customs Licensing Fee Hike Sparks Industry Backlash

The Nigeria Customs Service (NCS) announced a dramatic increase in licensing fees under the Customs Act 2023. New agent licenses now cost ₦10 million, up from ₦515,000, while renewals are ₦4 million. Bonded warehouse fees jumped from ₦60,000 to ₦20 million, and terminal operators must now provide ₦500 million in bank bonds.

While the NCS claims the hike reflects “economic realities” and aims to professionalize the sector, manufacturers and logistics firms warn of inflationary consequences. Smaller operators face potential displacement, raising fears of monopolistic practices and reduced competition.

Stakeholders are calling for phased implementation and greater transparency to avoid destabilizing supply chains.

Dangote Refinery Reshapes Nigeria’s Fuel Economy

In a landmark move, Dangote Refinery began direct engagement with marketers ahead of its August 15 rollout. The refinery will supply petrol and diesel directly, bypassing intermediaries and deploying 4,000 CNG-powered trucks for nationwide distribution.

Buyers of 500,000 litres will receive an additional 500,000 litres on credit for two weeks, backed by bank guarantees. This model promises to lower fuel prices, stabilize supply, and ease cash flow constraints for bulk buyers.

The Nigerian Labour Congress (NLC) hailed the refinery as a “transformative national asset,” urging the government to sell crude in naira to further reduce costs. Manufacturers see this as a potential turning point amid forex-driven import challenges.

Tax Reform Signals Nigeria’s Fiscal Reset

President Tinubu signed four major tax laws, NTA, NTAA, NRSA, and JRBA, into effect on June 26, 2025, consolidating over 20 legacy laws into a unified framework. The reforms, set to take effect on January 1, 2026, aim to simplify compliance, boost revenue, and promote equity.

Key provisions include:

• SME Relief: Businesses with turnover ≤ ₦100 million are exempt from Company Income Tax and Capital Gains Tax.
• Development Levy: A 4% levy replaces multiple sectoral taxes like TETFund and NASENI.
• Minimum Tax Rate: Large firms must pay at least 15% effective tax, aligning with OECD standards.
• Digital Compliance: Mandatory e-invoicing and encrypted fiscal devices will curb tax evasion.
• Environmental Surcharge: A 5% tax on fossil fuels nudges businesses toward greener alternatives.

Financial institutions must now verify Tax Identification Numbers (TINs), tightening enforcement. VAT refunds will be processed within 30 days, improving liquidity for compliant firms.

The Road Ahead

These developments signal a recalibration of Nigeria’s economic priorities, balancing fiscal discipline, industrial growth, and social equity. As stakeholders adapt to new realities, the coming months will test the resilience of businesses and the effectiveness of policy execution.