Nigeria’s GDP Forecast to Grow 3.7% in Q4 2025 as Fiscal Reforms Boost Revenue and Investor Confidence
Nigeria’s economy is set to close 2025 on a positive note, with analysts projecting a 3.7% Gross Domestic Product (GDP) growth in the fourth quarter. According to the Q3 2025 Nigeria Business Climate Report by Cowry Asset Management, recent fiscal and monetary reforms are beginning to deliver measurable impacts on government revenue, exchange rate stability, and overall investor confidence.
The report, authored by Johnson Chukwu, Managing Director of Cowry Asset Management, described 2025 as a transition year for the Nigerian economy. It noted that reforms aimed at tightening fiscal policy and improving monetary coordination have started to stabilize key indicators, though long-term inclusive growth remains a challenge.
A key driver of the positive outlook is the expected improvement in crude oil production, projected to rise to between 1.6 and 1.65 million barrels per day. This recovery, alongside enhanced operational efficiency by local producers, is expected to strengthen foreign exchange inflows. Inflation, which averaged above 22% earlier in the year, is forecast to ease below 20% by December 2025 as the naira gains stability and market confidence improves.
Chukwu also predicted that Nigeria’s external reserves could climb to $46.5 billion by year-end, supported by disciplined Central Bank interventions and moderate oil receipts. He forecast the naira to trade within the range of N1,280–N1,350 per dollar, reflecting improved liquidity and reduced import dependency. However, he cautioned that sustaining growth would require “productivity-led expansion and private sector resilience.”
On the fiscal side, Cowry’s report highlighted the success of government reforms in tax administration and fiscal transparency, noting a sharp rise in corporate tax, VAT, and petroleum profit tax collections. Data from the Federal Inland Revenue Service (FIRS) and the Federation Account Allocation Committee (FAAC) revealed double-digit growth in monthly allocations between January and August 2025. The report, however, warned that without a parallel push for productivity and infrastructure, “heavy taxation in an unproductive economy could weaken competitiveness and slow consumer spending.”
source: tribune