Nigeria’s economy is projected to grow at a slower pace with its real Gross Domestic Product (GDP) growth at 3.2 per cent in 2025 and 3.1 per cent in 2026.
The African Development Bank (AfDB) made these projections in its 2025 African Economic Outlook released on Tuesday at its ongoing 2025 Annual Meetings in Abidjan, Côte d’Ivoire.
According to the report, the projections marks a downward revisions from earlier projections by the bank.
The AfDB said that the slowdown was mainly due to reduced demand from key trading partners like the United States and China; global supply chain disruptions and increased volatility in financial markets.
It said that unlike most West African countries expected to grow at five per cent or more in 2025, Nigeria, along with Ghana and Sierra Leone, was set to lag behind.
Across the continent, the report said that Africa’s economic growth improved marginally to 3.3 per cent in 2024, up from 3.0 per cent in 2023, driven by government spending and private consumption.
It, however, cautioned that persistent inflation, currency depreciation, high debt servicing costs, and geopolitical tensions continued to threaten the fragile recovery.
The report said that recent trade tensions, including tariffs imposed by the United States and retaliatory measures, had deepened uncertainties and negatively impacted commodity prices and financial markets.
“As a result, Africa’s growth outlook has been revised downwards to 3.9 per cent in 2025 and 4.0 per cent in 2026.
“In spite these challenges, 21 African countries are expected to achieve growth above five per cent in 2025.
“Notably, Ethiopia, Niger, Rwanda, and Senegal could surpass the seven per cent growth threshold needed to drive poverty reduction and sustainable development.
“Regional variations however remains significant,” it said.
The report projected East Africa to accelerate growth to nearly six per cent, while Central and North Africa face downward revisions due to conflicts and declining exports.
It said that Southern Africa’s growth remained subdued, with South Africa expected to record modest recovery.
The AfDB reiterated that Africa’s per capita GDP growth, although improving, remained below global averages but continued to hold promise for long-term economic resilience.
Nigeria’s economic reforms yielding results – AfDB
The economic reforms rolled out by the Nigerian Government since May 2023 have boosted the country’s economy.
This is contained in the African Economic Outlook 2025 released by the Africa Development Bank (AfDB) at its ongoing Annual Meetings in Abidjan on Tuesday.
According to the report, services contributed three-quarters growth to Nigeria’s Gross Domestic Product (GDP) .
The report attributed 13 per cent to industry growth, driven by higher oil production, which rose 2.8 per cent to 1.56 million barrels per day in 2024.
It said that agriculture production supported by competitive domestic prices contributed nine per cent to GDP growth.
“Demand was moderated by suppressed consumption due to higher prices. Market determined petrol prices increased 77 per cent and the Naira weakened 42 per cent during 2024.
“Both key underlying factors contributed to inflation, which stood at 33.2 per cent in 2024, up from 24.7 per cent in 2023.
“To dampen inflation pressures, the Central Bank of Nigeria (CBN) tightened the policy rate to 27.5 per cent,” it said.
The report said that fiscal deficit of 3.9 per cent of GDP, which
was marginally lower than 4.0 per cent in 202, was largely driven by increased non-oil revenue.
“Public debt increased to 52.3 per cent of GDP in 2024 from 41.5 per cent in 2023,’’ it said
According to the report, this is driven by a weaker Naira and increased public borrowing.
It said that the current account surplus increased to 9.2 per cent of GDP in 2024 from 1.6 per cent of GDP in 2023 as higher import prices lowered imports.
The report said the financial services sector initiated recapitalisation to align with the trillion-dollar economy agenda, while financial stability improved.
It said that non-performing to gross loans ratios fell to 4.1 per cent mid-2024 from 4.4 per cent in 2023.