Nigeria’s Central Bank (CBN) has announced an optimistic economic outlook for 2025, projecting a Gross Domestic Product (GDP) growth of 4.17%, up from 3.36% in 2024. This forecast comes at a time when the country is navigating complex domestic and global economic landscapes, including fiscal and monetary reforms, fluctuating oil prices, and efforts to diversify its revenue streams beyond the volatile oil sector.

The projection was unveiled by Mr. Muhammad Abdullahi, Deputy Governor of the CBN Economic Policy Directorate, during the 11th edition of the National Economic Outlook, themed “Implications for Businesses in 2025.” The hybrid event, held in Lagos, was organized by the Chartered Institute of Bankers of Nigeria (CIBN) Centre for Financial Studies in collaboration with B. Adedipe Associates Ltd.

Reforms Driving Economic Growth

Mr. Abdullahi emphasized that Nigeria’s economic recovery is deeply tied to sustained government reforms, stable crude oil prices, and improvements in domestic oil production. Following a series of fiscal and monetary adjustments in recent years, including efforts to control inflation and stabilize the exchange rate, the CBN believes these measures are beginning to yield positive results.

“2025 presents a promising opportunity for Nigeria,” Abdullahi said. “Our projections reflect a continuation of the gains from the government’s economic reforms. We are optimistic about sustained growth due to improved oil production and stable global crude oil prices.”

He further stated that the country’s inflation rate is expected to decline in the coming months, aligning with ongoing economic reform initiatives aimed at curbing inflationary pressures. The CBN’s targeted inflation rate of 15% for 2025 is crucial to achieving this stability, and it will require effective collaboration between monetary and fiscal authorities alongside active participation from the private sector.

“Stability in the exchange rate will play a significant role in maintaining this growth trajectory. By stabilizing the local currency and continuing to promote prudent monetary policies, we can create an environment conducive to business expansion and foreign investment,” Abdullahi added.

Diversification Beyond Oil

A critical aspect of Nigeria’s economic strategy in 2025 is its focus on diversification. For years, Nigeria’s economy has been heavily reliant on crude oil exports, but recent government efforts have prioritized reducing this dependence. The administration has ramped up tax reforms, which aim to broaden the country’s revenue base and improve the efficiency of tax collection.

“Through ongoing tax reforms aimed at broadening the tax base and improving collection efficiency, the government is working to establish a more sustainable fiscal environment,” Abdullahi said. “These reforms may present challenges in the short term, but they are essential for building a more resilient and diversified economy in the long run.”

The CBN believes that this diversification strategy will open up new revenue streams, reduce economic vulnerabilities, and enhance the country’s overall economic stability. With abundant natural resources and the government’s commitment to reform, Nigeria stands at a crossroads of innovation and investment opportunities.

Policy Landscape and Business Opportunities

The evolving policy landscape presents both challenges and opportunities for businesses, according to experts. The CBN is prioritizing price stability and financial sector reforms, especially in supporting small and medium-sized enterprises (SMEs) and critical sectors that drive economic growth. Abdullahi emphasized that these efforts are geared toward creating an enabling environment for businesses to thrive.

“The government is making deliberate strides to diversify its revenue streams and reduce dependence on the volatile oil sector,” he said. “As businesses, it is crucial to adapt to these changes, understanding that they will ultimately strengthen the economic foundation for future growth.”

Prof. Pius Olanrewaju, President of the Chartered Institute of Bankers of Nigeria (CIBN), noted that the current economic environment in Nigeria is fraught with both challenges and opportunities. In 2024, Nigeria experienced gradual recovery amidst global and domestic pressures. Moving into 2025, Olanrewaju urged businesses to critically examine the landscape and strategically position themselves for sustainable growth.

“This forum will help us identify the risks, harness the opportunities, and strategize for the future,” Olanrewaju said.

Collaboration Among Experts

The economic outlook forum brought together key players from various sectors to discuss the implications of Nigeria’s economic trajectory. Key speakers included Dr. Kabir Katata, Director of Research, Policy, and International Relations at the Nigeria Deposit Insurance Corporation; Dr. Henrietta Onwuegbuzie of the Lagos Business School; and Akinsola Akeredolu-Ale, CEO of Lagos Commodities and Fixtures Exchange. Other notable figures included Mr. Akeem Lawal, Managing Director of Interswitch (Purepay); and Chinwe Uzoho, Regional Managing Director, West and Central Africa Network International.

The diverse expertise represented at the event underscores the collective effort needed to shape Nigeria’s economic future. By fostering collaboration between policymakers, business leaders, and financial institutions, the country is better equipped to tackle its pressing economic challenges and seize emerging opportunities.

Challenges Ahead

While the prospects for 2025 are promising, Nigeria’s economy is still navigating significant headwinds. External shocks, inflation, global supply chain disruptions, and fluctuating oil prices remain major risks that could undermine economic progress. Additionally, the ongoing insecurity in some regions of the country poses challenges to business operations and economic stability.

Nevertheless, the CBN is committed to using a balanced approach that combines short-term stability with long-term economic reforms. Abdullahi stressed the importance of creating a resilient economy that can withstand external shocks while promoting sustainable growth.

“We must remain focused on the vast opportunities before us. Nigeria’s abundant resources, coupled with the current administration’s commitment to economic reform, offer a fertile ground for innovation, investment, and sustainable growth,” Abdullahi concluded.

Conclusion

As Nigeria steps into 2025, the Central Bank’s optimistic GDP growth forecast reflects confidence in the country’s economic resilience and reform agenda. The combination of stable oil prices, effective government reforms, and diversification efforts provides a solid foundation for economic recovery and long-term growth. However, success will depend on the government’s ability to navigate complex challenges, including inflation control, exchange rate stability, and fostering an environment conducive to private sector investment.

For businesses and stakeholders across sectors, 2025 represents both a promising future and a call to action—an opportunity to adapt to changing economic conditions and seize the potential for long-term prosperity in Africa’s largest economy.

Ready to take your career to the next level? Join our dynamic courses: ACCA, HESI A2, ATI TEAS 7 , HESI EXIT  , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟 Dive into a world of opportunities and empower yourself for success. Explore more at Serrari Ed and start your exciting journey today! ✨

Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

23^rd January, 2025