According to the Economic Outlook 2025 report from the Mastercard Economics Institute, Nigeria’s Economy is expected to expand by 2.9 percent in 2025, falling slightly below the global projection of 3.2 percent. While Inflationary Pressures persist, the report highlights the country’s resilience, with remittance inflows playing a crucial role in sustaining household incomes and consumer activity. Despite these challenges, consumer spending is projected to grow by six percent, reflecting continued economic adaptability..
The report highlights that despite ongoing inflationary pressures, Nigeria continues to harness its human capital and remittance inflows to sustain economic stability. Remittances remain a key driver of household consumption, helping to offset the impact of rising prices. Nigeria’s ability to adapt to global and regional economic shifts further demonstrates its resilience. Khatija Haque, Chief Economist for EEMEA at Mastercard, emphasised that the country’s growth prospects are closely linked to remittances and consumer spending. She also underscored the importance of expanding financial inclusion and tackling Inflation to support long-term economic progress.
A good financial ecosystem will drive economic growth.
Moreover, Folasade Femi-Lawal, the Mastercard’s Country Manager and Area Business Head for West Africa, highlighted the vital role of remittances in supporting economic resilience. She stated that Mastercard Nigeria remains committed to advancing contactless payment solutions to enhance transaction efficiency, security, and affordability. Strengthening the financial ecosystem, she noted, is essential for ensuring smooth and secure payments that drive economic activities. In addition to this, expanding financial Technology and building trust in digital banking could further promote financial inclusion, making transactions more accessible for both individuals and businesses.
However, sustaining resilience will require more than remittances and consumer spending. A stronger focus on Economic Diversification is essential to reducing Nigeria’s vulnerability to external shocks. While remittances provide short-term relief, Investment in manufacturing, agriculture, and technology could drive long-term growth. Boosting local production in key sectors would enhance job creation, reduce dependence on imports, and position Nigeria as a hub for Innovation and investment within Africa. Expanding energy access and improving Infrastructure would also support industrial growth.
Policymakers must act to stabilise the economy.
At the same time, improving fiscal policies and tackling inflation remain pressing concerns. Rising consumer prices continue to strain household incomes, making it crucial for policymakers to stabilise the economy. Supporting local production through incentives for manufacturers and farmers could help reduce reliance on expensive imports. Interest Rate policies must balance inflation control with business growth, ensuring companies can access credit without excessive borrowing costs. Tax reforms that ease the burden on small businesses could also boost employment and encourage entrepreneurship. Strengthening fiscal discipline through better Revenue management and reduced government waste would further reinforce economic stability.
Infrastructure development is another key factor in sustaining long-term growth. Expanding transport networks, Electricity supply, and digital connectivity would enhance Productivity and attract investment. A more efficient road and rail system could lower Logistics costs, improving market access for businesses. Reliable power remains a major challenge, and increased investment in Renewable Energy sources like solar and hydro could provide sustainable solutions. Strengthening public-private partnerships in infrastructure projects would accelerate progress, ensuring resources are efficiently utilised for national development.
Related Article: Nigeria’s economy to grow by 3.5% in 2025
Ultimately, Nigeria’s economic resilience will depend on a combination of reforms and sustained investments in key sectors. While remittances and consumer spending provide short-term stability, long-term growth requires diversification and stronger economic policies. Expanding industries like Manufacturing and Agriculture could create more jobs and reduce reliance on external inflows. At the same time, improving governance and fostering innovation will help build a more competitive economy. With the right policies, Nigeria can overcome its economic challenges and create a more sustainable future for its people.