Nigeria’s economy is showing encouraging signs of recovery, driven by positive macroeconomic indicators such as rising foreign direct investment (FDI) and a growing GDP. International institutions like the International Monetary Fund (IMF) have endorsed the country’s reform initiatives, suggesting that Nigeria is on track to regain investor confidence similar to the 2000s era. The Central Bank of Nigeria (CBN) continues to play a vital role in stabilizing the economy, especially through strategic monetary policies that have bolstered investor trust, as evidenced by a positive trajectory in Nigeria’s Eurobond market.
One key development has been the rebasing of the country’s GDP, which now includes rapidly growing sectors like fintech, e-commerce, and digital services. This revision has expanded Nigeria’s economic size and reflects the dynamic growth of these newer sectors, which are expected to contribute more significantly to GDP. While some analysts debate the timing of this rebasing, there is consensus that it provides a clearer picture of the economy’s potential, particularly in capturing informal sector activities that were previously underrepresented.
Furthermore, Nigeria’s financial stability has improved, with increasing government revenues and a stronger revenue-to-debt service ratio. The naira has also gained strength, appreciating by nearly 7% against the dollar in February, buoyed by improved foreign exchange liquidity and the CBN’s forex interventions. This stability is fostering confidence in the domestic market, prompting foreign investors to increase their presence in Nigeria’s various sectors, including agriculture and manufacturing.
Despite challenges like high inflation rates and the ongoing impact of deep-seated economic reforms, the outlook for Nigeria’s economy remains optimistic. Experts project a GDP growth rate of 3.68% for 2025, supported by sustained increases in oil production and strong growth in non-oil sectors. The government’s 2025 budget and strategic monetary measures are expected to further stimulate economic growth, positioning Nigeria for long-term stability and prosperity.
SOURCE: GUARDIAN