Nigeria’s economy is set for a modest recovery in 2025, driven by six pivotal sectors: agriculture, oil and gas, consumer goods, industrial goods, banking, and telecommunications, according to Afrinvest’s Nigeria Economic and Financial Market Review of 2024 and 2025 Outlook. The report, titled “Beyond the Rhetorics: Transforming Reforms to Tangibles,” highlights the potential for stabilizing inflation, increased global demand, and the implementation of critical reforms to fuel economic growth.
Economic Outlook for 2025
Afrinvest projects that the proposed tax reforms could unlock about ₦7.5 billion annually, essential for fiscal sustainability. This comes against the backdrop of Nigeria’s debt-to-GDP ratio rising to ₦138 trillion and 58.3% in 2024, up from ₦97.3 trillion and 40.1% in 2023.
The banking sector’s recapitalization is also deemed crucial to achieving Nigeria’s $1 trillion economy goal by 2030, with positive ripple effects anticipated across other sectors, including job creation and foreign capital inflows.
Six Sectors to Watch
- Agriculture
The agriculture sector is poised for significant growth, driven by strategic investments completed in 2024, rising domestic and regional demand, and Federal Government interventions such as tariff waivers on equipment imports. - Oil & Gas
Despite anticipated moderation in global energy prices, the oil and gas sector is expected to remain resilient, benefiting from foreign exchange balance sheet improvements and increased corporate activities. - Consumer Goods
While inflationary pressures and exchange rate volatility may continue to influence consumer spending patterns, the sector’s outlook remains cautiously optimistic as businesses adapt to these challenges. - Industrial Goods
With moderating inflation and foreign exchange pressures, the industrial goods sector is expected to thrive. Federal Government infrastructure investments will also provide strong support for growth. - Banking
Banks are likely to experience significant progress following the sector’s recapitalization exercise in 2025. This is expected to enhance investor confidence and stabilize the regulatory environment, driving expansion and balance sheet optimization. - Telecommunications
Although foreign exchange challenges may strain operational costs, strategies such as renegotiated tower lease agreements and tariff adjustments in Q1 2025 will help the sector navigate hurdles and maintain profitability.
From Rhetoric to Reality
Afrinvest underscores the need for tangible implementation of government reforms to translate rhetoric into measurable economic benefits. Delays in addressing fiscal challenges could have severe consequences. Nigerians will closely monitor these reforms in 2025, hoping for transformative outcomes.
This multi-sectoral push underscores Nigeria’s potential for sustainable growth amid global and domestic challenges, charting a path toward economic recovery and resilience.
