Nigeria's Economy Records Robust Growth and Enhanced Stability in First Half of 2025

Strong Economic Performance in H1 2025

Nigeria's economy demonstrated significant growth and increased stability in the first half of 2025, with real Gross Domestic Product (GDP) expanding by 3.9%. This figure, reported by the Ecofin Agency and corroborated by the International Monetary Fund (IMF), reflects a marked improvement in the nation's economic landscape. The National Bureau of Statistics (NBS) detailed this growth, indicating a 3.13% increase in the first quarter and a more robust 4.23% in the second quarter of 2025, contributing to the overall positive half-year performance.

The economic expansion was primarily fueled by a dual recovery in both the oil and non-oil sectors. The services sector emerged as a key driver, contributing 57.5% to the aggregate GDP in Q1 2025 and growing by 4.33%. Sub-sectors such as Information and Communication (Telecommunications), Real Estate, Financial and Insurance, Trade, Construction, and Manufacturing showed notable resilience and positive growth.

Oil Output Reaches Four-Year High

A significant contributor to Nigeria's economic resurgence was the oil sector, which saw its output reach a four-year high of 1.68 million barrels per day (mbpd) in the second quarter of 2025. This increase is largely attributed to successful efforts in curbing oil theft and enhancing security within the oil-producing regions.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, confirmed that current production, including condensates, hovers around 1.7 mbpd. Nigeria is now preparing to advocate for a higher oil production quota of at least 2 mbpd at the upcoming Organisation of Petroleum Exporting Countries (OPEC) meeting in November, citing improved production capacity and infrastructure.

Enhanced Currency Stability and Moderating Inflation

The Nigerian Naira demonstrated relative stability during the first half of 2025. As of October 28, 2025, the currency traded around ₦1,457 per US dollar. This stability is a result of the Central Bank of Nigeria (CBN)'s monetary policy reforms, notably the 2023 unification of exchange rates, and sustained interventions in the foreign exchange market. The Naira appreciated by 3.5% against the US dollar over the past ten months, reaching ₦1,500/$ at the parallel market by October 24, 2025. Furthermore, Nigeria's external reserves saw an increase, reaching $42.865 billion as of October 22, 2025.

While inflation remains a challenge, it has shown tentative signs of moderation. The inflation rate stood at 18.2% as of September 2025, with food inflation at 24%. The CBN projects that inflation could drop below 20% by the end of the year, supported by its tight monetary policy stance, which included holding the Monetary Policy Rate (MPR) at 27.50% in H1 2025 to anchor inflation expectations.

Outlook and Remaining Challenges

Despite the positive economic indicators, the nation still faces challenges. These include persistent inflationary pressures, fiscal constraints, and the need for continued strategic investments in infrastructure, digital services, and education to transition from stabilization to sustained growth. The Manufacturers Association of Nigeria (MAN) highlighted concerns regarding job losses in the first half of 2025 and high lending rates impacting the manufacturing sector. Nevertheless, the overall sentiment points towards a resilient economy making strides towards a more stable and prosperous future.