SMALL BUSINESSES STRUGGLING WITH INFLATION

Name: Adeagbo Boluwatife itunu
Matric: 240912128
Course: Online Journalism (MCM 201)

Nigeria's small businesses are still struggling with inflation, despite signs that price pressures
are easing.
Inflation fell to 15.15% in December 2025, with food inflation dropping to 10.84%, driven by
policy reforms, higher interest rates, improved harvests, and a more stable naira.
Despite this cooling trend,many small and medium enterprises (SMEs) from street vendors and
market traders to small chops and service provides report ongoing hardship. Inflation has
driven up the cost of raw materials,transportation,energy and imported goods, squeezing profit
margins and forcing many to raise prices or cut operations.
In Lagos markets like Balogun and Oshodi, traders face sharply rising input costs, with
wholesale prices often doubling while customer spending stays weak. Higher fuel, transport,
and packaging costs force retailers to raise prices just to survive, despite customer complain Any tax reform must reflect the current economic realities Nigerians are facing,” said a Lagos-based economist, stressing that public education and transparency would determine the policy’s success.
 
In response, the Ministry of Finance stated that stakeholder consultations would continue before full implementation. Public sensitization campaigns are also planned to help citizens understand how the new tax structure affects individual and businesses.
Nigeria has historically recorded one of the lowest tax-to-GDP ratios globally, prompting repeated reforms aimed at boosting government revenue. Analysts note that this policy differs from earlier ones by placing equal focus on revenue generation and economic sustainability.
The new tax policy Is expected to take effect later in the year, pending legislative approval. Experts say its long-term success will depend on consistent enforcement, accountability, and the visible use of tax revenue for public development.