Onome Amuge
Nigeria’s economy is expected to post a recovery in the second half of 2025 as ongoing fiscal and monetary reforms improve public revenues and investment capacity, though risks from inflation, insecurity and global volatility remain, according to a new outlook by the Nigeria Economic Summit Group (NESG).
In its half-year report, Staying the Course on Reforms: Turning Economic Gains into Social Progress, the Abuja-based policy think-tank projected real GDP growth of 4.0 per cent in the second half of 2025, bringing full-year expansion to about 3.8 per cent. That compares with average growth of below 3.5 per cent in 2023 and 2024.
The group said the trajectory reflected a modest recovery and a slight improvement over previous years, but stressed that the pace remains low relative to Nigeria’s economic growth potential and will be insufficient to generate broad-based employment or meaningful gains in per capita income.
The oil sector and new refining capacity are expected to support industrial activity, while services will remain the key driver of growth thanks to digitalisation, financial services and urban expansion. Agriculture, however, is set to remain constrained by flooding, rising input costs and infrastructure bottlenecks.
Crude oil production is forecast to average 1.7 million barrels per day in the second half, below the 2.06 million b/d budget target but higher than 2024 levels. Benchmark oil prices are expected to hover between $76 and $80 a barrel, above the government’s $75 assumption.
The NESG noted that the removal of fuel subsidies and exchange rate unification were boosting government revenues and fiscal space, enabling greater capital spending in infrastructure and social services. “A stable and supportive business environment, underpinned by sound infrastructure and policy frameworks, will be essential for attracting both domestic and foreign investment,” the report said.
On prices, the group projected inflation to average 24.5 per cent in the second half and end the year at about 24 per cent, down from current levels but still among the highest in Africa. Inflation will moderate as the effects of subsidy removal wane and foreign exchange markets stabilise, but structural cost pressures are expected to persist.
“The pace of disinflation in 2025H2 will largely depend on the effectiveness and consistency of the reforms being implemented by the current administration,” the report noted, adding that the Central Bank of Nigeria is likely to slow its hawkish monetary stance to support growth while seeking alternative ways to rein in prices.
The think-tank warned that despite encouraging macroeconomic signals, Nigeria faces continued headwinds from fiscal pressures, security concerns and the risk of external shocks. It cautioned that reforms will only deliver lasting dividends if translated into tangible social progress.
“Without deliberate and coordinated efforts to implement recommended policies,particularly those aimed at translating macroeconomic stability into tangible socio-economic improvements,the benefits of growth may remain limited for the majority of Nigerians,” the report said.
