Despite positive strides toward economic recovery and industrial self-reliance, Nigeria’s economy remains significantly vulnerable to external shocks, according to the latest Afreximbank Business Report released on Tuesday. The African Export-Import Bank projects that Nigeria’s Gross Domestic Product (GDP) growth will rise modestly from 3.4% in 2024 to 3.8% in 2025, buoyed largely by increased domestic refining of petroleum products. However, the report warns that this growth is fragile, as the country’s overdependence on hydrocarbons continues to expose it to global market volatility.
The report highlights the strategic benefits of Nigeria’s expanded domestic refining capacity—an indirect reference to the recently operational Dangote Refinery—stating that it will reduce reliance on imported fuel, improve energy self-sufficiency, and stimulate industrial output. These are expected to bolster economic activity and create more stable growth pathways for the country.
Yet, this progress is overshadowed by structural weaknesses. With oil and gas accounting for nearly 90% of export earnings and around 25% of government revenue, Nigeria’s fiscal and external balances are deeply intertwined with oil price movements. In April 2025, crude prices fell sharply due to escalating global trade tensions and declining demand forecasts. Afreximbank notes that a prolonged downturn could derail economic momentum and strain foreign exchange reserves.
Although Nigeria is not directly impacted by recent U.S. tariff hikes—given that crude oil, its primary U.S. export, remains exempt—the bank warned of indirect consequences. “Reduced global trade volumes, investor nervousness, and economic slowdowns in key markets like China and the EU could depress demand for Nigerian exports,” the report stated.
This broader slowdown poses a serious concern for Nigeria’s trade-dependent sectors and underscores the urgency for economic diversification. The report adds that external vulnerabilities, such as fluctuating oil prices and geopolitical uncertainties, could reverse gains if not carefully mitigated through strategic policy reform.
Despite global turbulence, Afreximbank expressed cautious optimism about Nigeria’s medium-term outlook. Inflationary pressures have begun to ease, and interest rates are stabilizing, conditions that are expected to spur consumer spending and encourage private-sector investment. These trends, the report said, will likely create a more robust platform for sustainable economic growth if current reforms continue.
Nigeria’s fiscal authorities have introduced policies aimed at macroeconomic stability, diversification, and improved business conditions. These include reforms in taxation, FX unification, and incentives for non-oil sectors like agriculture, tech, and manufacturing.
Afreximbank emphasized Nigeria’s strategic importance within West Africa. With its population, geographic size, and market scale, the country is well-positioned to become a regional trade and investment hub. Ongoing infrastructure upgrades—especially in ports, roads, and rail—are expected to facilitate smoother trade logistics and enhance Nigeria’s competitiveness.
The report lauded Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) and noted that integrating regionally could further shield the country from global headwinds.
While landmark projects like the Dangote Refinery and macroeconomic reforms are signs of progress, the continued dependence on oil exports leaves Nigeria exposed. Afreximbank concludes that long-term economic resilience will require a deliberate push toward economic diversification, strengthened regional integration, and policies aimed at insulating the economy from global volatility.
As the global economic landscape remains uncertain, Nigeria’s ability to navigate external challenges while deepening structural reforms will determine whether the projected growth becomes sustainable.