According to the most recent NESG-Stanbic IBTC Business Confidence Monitor (BCM) survey, the Nigerian Economy is expected to grow by 3.5% annually in 2025, up from the 3.2% forecasted in 2024. This positive outlook is attributed to gradual recovery from previous years’ challenges as Inflationary Pressures subside and the results of key government policies start to stabilize the economy. These policies, though initially looks disruptive, have started to lay the groundwork for sustainable growth and a more resilient macroeconomic structure.
Economic growth forecast for 2025 builds on the gains of the previous year, with a noteworthy 3.46 percent increase in the third quarter of 2024, and surpasses the growth rates observed in the first two quarters of 2024. This was also noticeably higher than the 2.54% reported during the same period in 2023, indicating a solid trend in the economic recovery. The growth further reflects the impact of key reforms, which have started to address structural challenges and promote a more stable economic environment.
Modest business improvements amid growth optimism.
It is anticipated that these measures will continue to pay off in 2025, boosting trust in the nation’s economic future and demonstrating the beneficial effects of reforms and the stabilization of macroeconomic conditions. These policy changes, albeit initially challenging, have opened the door for long-term gains and helped create a more sustainable and balanced macroeconomic climate. The report added that inflationary pressures that have slowed economic activity are now abating, creating a more advantageous climate for consumers and businesses.
The report further highlighted that businesses in Nigeria recorded modest improvements in December 2024, partly due to seasonal factors. Overall performance stayed subdued, notwithstanding an increase in activity in several sectors. According to the survey, there was a surge in business activity throughout the holiday season as the Current Business Index recovered from -2.74 in November to +0.77 in December. International agencies such as the World Bank and the International Monetary Fund (IMF) have also expressed optimism regarding Nigeria’s economic prospects in 2025, albeit with relatively lower projections.
Optimistic growth projections lag behind regional average.
Acknowledging that recent measures have begun to restore macroeconomic stability, the World Bank projects a 3.3% growth rate for Nigeria in 2024, and expected to increase to an average of 3.7% annually from 2025 to 2027. Meanwhile, the IMF forecast the Nigerian economy to grow at a somewhat lower rate of 3.2% in 2025. Although encouraging, these estimates are below the 4% growth predicted for all of sub-Saharan Africa in 2025, underscoring the necessity for Nigeria to overcome its major challenges in order to catch up.
This glaring gap between Nigeria’s growth estimates and the sub-Saharan African average demonstrates that Nigeria must expedite efforts to diversify its economy, lessen its dependency on oil money, and invest in key infrastructure. Improving governance and building a more conducive environment for Private Sector participation would also be vital in unlocking the country’s full economic potential. While hurdles remain, the progress in 2024 offers a solid basis for future expansion. The improving trajectory of the Nigerian economy is encouraging as it shows resilience in the face of major obstacles.
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Particularly, the optimistic forecast for 2025 is underpinned by continuous reforms and sustained advancements in resolving Nigeria’s structural issues. Policymakers have demonstrated a commitment to fostering Economic Stability and growth, even as they navigate the complexities of reform implementation. While the immediate benefits of these reforms are evident in the improved growth forecasts, sustained efforts will be needed to ensure that the gains are broadly distributed across sectors and regions. The government’s focus on addressing structural bottlenecks, promoting investment, and enhancing Productivity will be critical in achieving this goal.