Economic Growth and Reform Efforts in Nigeria
Nigeria’s economy showed signs of recovery in the first quarter of 2025, with a growth rate of 2.98 per cent, slightly higher than the 2.74 per cent recorded in the previous quarter. This modest improvement indicates a gradual rebound from the sluggish performance experienced in 2023.
Wale Edun, Nigeria’s Finance and Coordinating Minister of the Economy, emphasized the need for accelerated economic growth, aiming for an annual growth rate of 7 per cent by 2027. This target is not just an economic goal but also a moral imperative to reduce poverty and achieve a N1 trillion economy by 2030.
Edun highlighted that the reforms under President Bola Tinubu’s Renewed Hope Agenda, although sometimes met with resistance, are beginning to yield positive results. These reforms aim to build a competitive economy that creates jobs and lifts millions out of poverty.
In the second quarter of 2025, the economy grew at a rate of 4.23 per cent, the highest in a decade outside the post-COVID rebound. Thirteen sectors recorded growth above seven per cent, up from nine in the previous quarter, indicating broad-based resilience. The industrial sector nearly doubled its growth from 3.72 per cent to 7.45 per cent, while inflation eased to 18 per cent in December.
Foreign exchange reserves increased to $43 billion, and the country’s trade surplus stood at ₦7.4 trillion, signaling macroeconomic stability. The government has secured approval for a $300 million World Bank credit to support internally displaced persons and host communities in northern Nigeria. Additionally, $96 million in combined financing from the African Development Bank and the Islamic Development Bank was secured for the Sokoto Health Infrastructure Project, co-funded by the state government.
Edun noted that the share of income Nigerians spend on basic needs such as food, shelter, and clothing has dropped from 90 per cent to about half, suggesting a shift from subsistence towards productivity and affluence. Nigeria’s removal from the Financial Action Task Force (FATF) grey list marked a significant milestone in strengthening financial integrity and investor confidence. This move restored Nigeria’s credibility in the global financial system, lowering transaction costs and enabling smoother cross-border investments.
The recent $2.35 billion Eurobond issuance, which attracted over $13 billion in bids despite political headwinds, is evidence of renewed market confidence. The oversubscription reflects investors’ focus on the fundamentals of Nigeria’s economy rather than its politics.
To sustain this momentum, the government will focus on mobilizing domestic investment and attracting private capital to finance infrastructure and create jobs. Ministers overseeing key sectors such as agriculture, mining, health, education, infrastructure, and the digital economy are urged to work with state governments to identify “investment-ready projects” that meet investor expectations.
The next phase of reforms will focus on removing barriers holding back investors, including a review of tariffs and import restrictions to stimulate productivity and investment. A review of the federation’s balance sheet is also underway to optimize asset management for inclusive growth.
Fiscal reporting and expenditure frameworks are being strengthened to ensure that all Nigerians feel the gains of reforms. The growing capacity of the National Identity Management Commission (NIMC), which has issued over 125 million National Identification Numbers (NINs), enables the government to directly reach and support vulnerable citizens through digital payments.
Despite these efforts, poverty remains widespread in Africa’s largest economy. According to the World Bank, about 139 million Nigerians are classified as multidimensionally poor, lacking access to essentials such as food, healthcare, education, and decent housing. Soaring inflation and high living costs have deepened hardship, especially for low-income households.
President Bola Tinubu reiterated the administration’s focus on restoring investor confidence and maintaining economic stability despite political and security challenges. He stated that the task ahead is immense, but the administration is resolved to move forward with unity and purpose, guided by the Renewed Hope Agenda to build a prosperous, inclusive, and resilient Nigeria.