As 2025 unfolds against the backdrop of the 2024 challenges, there is a growing consensus that the Economy is on the path to recovery. Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reform Committee, reaffirmed his position on the Nigerian economic outlook, noting that Nigeria is on the road to recovery based on ongoing trade, monetary, and fiscal policy reforms. He expressed optimism that Inflation would have a base effect of about 25%, given that the government is not minting and infusing new money into the system. Therefore, there is less chance of excess money in circulation, which could lead to inflation.
Oyedele stated that he believes 2025 will provide more economic benefits to all Nigerians while answering questions at a panel discussion at the “Executive Roundtable on Nigeria’s 2025 Budget and Economic Outlook,” which was organized by PwC in collaboration with BusinessDay Media. The difficult times have passed, he said, acknowledging the impact Nigeria’s economic reforms have had on the populace. He pointed to foreign exchange instability and the rise in Petroleum product prices after Subsidies were removed as some of the factors that caused the country’s baseline inflation to soar to 34% in December 2024. Oyedele said that these factors won’t exist in 2025, so there won’t be any upward inflationary pressure.
Effective reforms are key to Nigeria’s growth trajectory.
Several economic analysts are optimistic about the country’s recovery trajectory, pointing fingers that Nigeria’s economic outlook is improving. Analysts perceived that policy reforms, more investment, and Structural Reforms are setting up the economy for recovery despite the difficulties of inflation, foreign exchange volatility, and slow growth in recent years. They point to several government programs, legislative changes, and international economic conditions as the main forces for the anticipated recovery. Nevertheless, the experts argue that Nigeria’s recovery is contingent on the effectiveness of the structural reforms introduced by the government.
According to Dr. Olusegun Omisakin, Chief Economist at NESG, Nigeria’s economy may expand by 5.5% by 2025 if the current reforms are carried out effectively. The economy will expand at a rate of 3.4% if the country sticks to the course tainted by perceived economic limits and ineffective policies. Additionally, the economy might expand by 2.7% if it were to undo some of the policy reforms the government has made. He added that if Nigeria adopts the proper economic reforms, inflation may decrease to 24.7% in 2025; nevertheless, if no decisive action is made, it may complete the year at 34%.
Forecasts predict inflation reduction and interest rate cuts.
A 2025 forecast by Agusto & Co., a Pan-African credit rating firm and a leading provider of industrial research and knowledge in Nigeria, shows that the country’s economy is delicately poised. It projects that GDP growth will be between 3 and 4.0% (base case scenario) in 2025 as inflation peaks and starts to fall, and then monetary conditions may ease by the end of the year. Based mostly on base effects, it forecasts a slowing of pricing pressures starting in the third quarter (Q3 2025).
For most of 2025, it expects the CBN to keep the Interest Rate environment comparatively constant. By the end of the year, it anticipates a cumulative interest rate reduction of 150–250 basis points based on its analysis. The credit rating firm also expects increases in crude oil production to help maintain the stability of the currency rate and support the availability of foreign exchange (FX), which will benefit Trade and other import-dependent businesses. Other reports such as the NESG-Stanbic IBTC Business Confidence Monitor (BCM) study, also provide optimism for Nigeria’s economy, projecting inflation to decline to 27.1% by December 2025.
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While the outlook is cautiously optimistic, experts concur that maintaining Economic Growth will necessitate consistent policies, better governance, and strategic investments in key industries. They cautioned that there may be difficulties due to external threats, including geopolitical conflicts and worldwide economic worries. Although, the country has a good chance of attaining long-term economic stability, if it sustains its reforms, increases its efforts at economic diversification, and boosts investor confidence. Whether Nigeria’s recovery is genuinely on stable ground will depend on the extent to which fiscal discipline, Infrastructure investment, and regulatory reforms translate into actual economic growth.