Nigeria’s struggle with economic freedom has become a matter of significant concern. According to the Economic Freedom of the World (EFW) 2025 Annual Report, Nigeria ranked 123rd out of 165 countries globally, scoring 5.89 out of 10, slightly ahead of nations like Tunisia, Guinea, and Ghana. Despite being Africa’s largest economy, Nigeria lags behind smaller countries such as Kenya, South Africa, and even Gambia, which has a population one-tenth of Nigeria’s. These findings highlight the difficulty for individuals in Nigeria to pursue business ventures and improve their economic circumstances freely.
The Cato Institute, in collaboration with the Fraser Institute, compiled the EFW index to evaluate the economic freedom of nations. The index measures key aspects such as the rule of law, property rights, sound money, the freedom to trade internationally, and the regulatory burden. It emphasizes that economic freedom allows individuals to make their own economic decisions with minimal interference, yet in Nigeria, these freedoms are constrained by inefficiencies in government operations and the country’s challenging business environment.
In 2023, the most recent year for which comprehensive data is available, countries like Hong Kong, Singapore, and New Zealand topped the index, while Nigeria’s score places it far below many African counterparts. This raises questions about why Nigeria, a resource-rich nation, ranks poorly in terms of economic freedom, especially when compared to smaller and less economically developed countries.
To gain a deeper understanding of the impact of Nigeria’s economic freedom ranking, Fairview Africa took to the streets to speak with residents and business owners. The feedback revealed that the struggle to succeed economically is not just about macroeconomic factors but also about the daily grind faced by ordinary Nigerians.
Comrade Usman Saliusu, a civil servant, shared his perspective on the challenges faced by aspiring entrepreneurs. “Sometimes people try to do business but end up making little profit because they don’t have enough financial backing. For instance, someone might have just 10,000 naira, but to start a viable business, they need at least 1 million naira. This lack of financial support can severely affect the success of the business and, in turn, limit profits,” he said. Usman’s sentiment reflects the difficulty of starting a business in Nigeria where access to funding remains a significant barrier for many.
Glory Olatayo, a market trader, highlighted another challenge affecting her ability to make a profit. “One of the reasons people struggle is the high cost of transportation. You go to the market to buy goods, and by the time you sell them, most of your profits have gone into transportation costs. The cost of goods is also rising, and with these extra expenses, it’s hard to make a real profit,” she explained. Glory’s story is one that resonates with many entrepreneurs, particularly those in small-scale trading, who find that the cost of doing business continually erodes their profits.
These real-life accounts underline the significant barriers to economic freedom and entrepreneurship in Nigeria. It is not just about the lack of laws protecting business activities but also about the very basic issues that businesses face daily. High costs, poor infrastructure, and limited access to funding contribute to Nigeria’s low ranking on the EFW index.
To improve Nigeria’s economic ranking and create a more conducive environment for businesses, many Nigerians believe that government policies must undergo substantial reform. The government must address several critical issues, including infrastructure, transportation, and access to finance. According to the EFW index, economic freedom is most enhanced when individuals have fewer constraints and can make decisions with more autonomy. However, in Nigeria, these constraints are manifold.
The Nigerian government could take a more active role in improving access to funding for small and medium-sized enterprises (SMEs). Introducing policies that support entrepreneurship and reducing regulatory burdens would help businesses thrive. Additionally, reducing the cost of transportation and ensuring that goods are more affordable would help alleviate some of the immediate barriers that traders and small-scale entrepreneurs face daily.
As the country continues to grapple with these issues, Nigeria’s ranking on the EFW index may improve with focused reforms. The 2025 report also highlighted that countries like Mauritius and Cabo Verde, despite their smaller economies, are performing much better due to their commitment to improving the conditions for business operations. Nigeria could look to these nations for inspiration as it seeks to transform its economic environment and improve the freedom with which its citizens can pursue their financial ambitions.
While the Cato Institute’s report highlights the systemic challenges faced by Nigerian entrepreneurs, the voices from the streets paint a clear picture of the real-life implications of these challenges. For Nigeria to move up in the rankings and for its people to experience true economic freedom, significant policy changes are needed to support entrepreneurs, reduce costs, and enhance overall business conditions.
