Nigeria’s economy expanded by 3.13 per cent year-on-year in the first quarter of 2025, according to newly rebased data released by the National Bureau of Statistics (NBS). The update, which adopts 2019 as the new base year, reveals a moderation from the preceding quarter. Crucially, the Services sector emerged yet again as the primary engine of this growth, highlighting its pivotal and expanding role in Nigeria’s economy.
Despite the upward revision of Nigeria’s GDP, the country’s position as the fourth-largest economy in Africa in nominal terms remains unchanged. Using the current exchange rate of N1,529.53 per dollar, Nigeria’s rebased economy for 2024 is estimated at approximately $243.53 billion. This figure still places it behind South Africa ($410.34 billion), Egypt ($347.34 billion), and Algeria ($268.89 billion), highlighting the significant economic ground yet to be covered.
The NBS data, unveiled on Monday, July 21, 2025, confirmed that the Services sector recorded a growth of 4.33 per cent and contributed a dominant 57.50 per cent to the aggregate gross domestic product (GDP). The strong performance by services-oriented industries showcases a continued shift in the structure of the Nigerian economy, with digital activities, trade, and financial services increasingly driving output.
While the 3.13 per cent Q1 2025 growth represents an improvement compared to the 2.27 per cent recorded in the same quarter in 2024, it marks a moderation from the 3.76 per cent rebased growth rate posted in Q4 2024. ]
The consistent dominance of the Services sector highlights its resilience and adaptability amidst prevailing macroeconomic challenges, including high inflation and currency volatility. The NBS identified crop production, trade, real estate, telecommunications, and oil and gas as the top five performing sectors, with services-oriented sectors occupying three of these five spots.
The 4.33 per cent growth within the Services sector is particularly noteworthy as it demonstrates the increasing contribution of non-oil sectors to the nation’s economic vitality. This growth is being driven by rising digital economic activities, expanding telecommunications penetration, and a resilient trade and real estate segment, all of which benefit from Nigeria’s large and growing population base.
The latest GDP figures are presented in the context of Nigeria’s much-anticipated national accounts rebasing exercise. The last such exercise was conducted in 2014, using 2010 as the base year. The current rebasing, which covers the period from 2019 to 2023 with 2019 as the new base year, aims to provide a more accurate and realistic reflection of the economy’s structure, composition, and dynamics.
Adeyemi Adeniran, statistician-general of the federation, explained that GDP rebasing is a routine global practice, conventionally undertaken every five years to update the parameters used to estimate economic output. This process ensures that new technologies, evolving production and consumption patterns, and emerging economic activities are accurately captured.
“As we are all aware, economies are dynamic. They change continually with innovation and new technologies, which alter the production and consumption patterns of individuals, households, firms, and government,” Adeyemi stated. He clarified that the exercise was not conducted to meet any specific government targets but as a standard statistical mandate.
Nigeria’s economy is now estimated to be substantially larger than previously believed. The nominal GDP for 2019, under the new base year, stands at N205.09 trillion. This figure progressed to N213.63 trillion in 2020, N243.30 trillion in 2021, N274.23 trillion in 2022, N314.02 trillion in 2023, and reached N372.82 trillion in 2024. This revision represents a 41.7 per cent increase in nominal estimates compared to the figures obtained during the 2014 rebasing exercise.
Adeyemi noted that this round of rebasing is by far the most comprehensive ever conducted by the NBS. It notably incorporated activities previously missing from reports, such as the Business Sample Census and the Agriculture Sample Census. Furthermore, new data collection activities, including the Nigerian Living Standards Survey (providing data on non-farming household enterprises), the National Agricultural Sample Survey, and the Annual Business Establishment Survey, among others, were integrated.
Significant improvements in coverage were also achieved for digital economic activities, water transportation, the activities of pension funds administrators, the National Health Insurance Authority (NHIA), modular refineries, the Nigerian Social Insurance Trust Fund (NSITF), domestic households as employers of labour, and informal sector activities. The application of Financial Intermediation Services Indirectly Measured (FISIM) in relevant economic activities further refined the estimates.
While the Services sector led the charge, other sectors also contributed to the overall GDP growth. The agriculture sector recorded a growth of 0.07 per cent, a notable recovery from the -1.79 per cent contraction seen in Q1 2024.
The industry sector also posted a respectable growth of 3.42 per cent, up from 2.35 per cent in Q1 2024. Both services and industry sectors increased their contribution to the aggregate GDP in Q1 2025 compared to the corresponding quarter in 2024.
However, the moderation in Q1 2025 growth from the preceding quarter, despite being higher than Q1 2024, signals the persistent challenges faced by the Nigerian economy, including high inflation and the ongoing need for structural reforms.
While the Services sector continues to be a resilient growth engine, analysts opine that sustainable and inclusive growth across all sectors will be critical for Nigeria to realise President Tinubu’s ambitious $1 trillion GDP target.
