Nigeria’s economy expanded by 3.13 per cent year-on-year in real terms in the first quarter (Q1) of 2025, according to the latest Gross Domestic Product (GDP) report released by the National Bureau of Statistics (NBS). This marks a significant improvement over the 2.27 per cent growth recorded in Q1 2024, indicating sustained recovery despite persistent macroeconomic challenges.
The report, published on Monday, attributed the positive growth trajectory to the robust performance of the services and industrial sectors, which continued to drive economic activities despite inflationary pressures and foreign exchange volatility.
The services sector maintained its position as the backbone of the economy, accounting for the highest contribution to GDP in Q1 2025. According to NBS, financial services, telecommunications, and trade recorded significant expansion, reflecting increased digital adoption, banking activities, and consumer spending recovery.
The industry sector also posted notable growth, buoyed by improved oil production and higher output in manufacturing. Crude oil and condensate production reportedly averaged 1.65 million barrels per day in Q1, slightly higher than the 1.61mbpd recorded in the same period of 2024, driven by reduced pipeline vandalism and improved operational efficiency in the upstream oil and gas industry.
Conversely, the agricultural sector experienced slower growth, constrained by rising input costs, insecurity in food-producing regions, and climate-related disruptions. Analysts have expressed concerns that unless these bottlenecks are addressed, food inflation could remain elevated, undermining consumer purchasing power.
The Q1 growth figures came despite Nigeria grappling with high inflation, currently above 31 per cent, and the lingering effects of foreign exchange market liberalization, which has kept the naira volatile. However, experts credit the modest growth to ongoing structural reforms, including:
The Federal Government’s infrastructure push, which has improved logistics and industrial activities.
Increased investment in oil and gas production, following reforms by the Nigerian National Petroleum Company Limited (NNPC).
Efforts by the Central Bank of Nigeria (CBN) to stabilize the financial system through targeted interventions and tighter monetary policies.
Speaking on the development, an economist at Financial Derivatives Company, Bismarck Rewane, noted that the 3.13 per cent growth is “encouraging but not sufficient to reduce poverty or unemployment significantly.” He emphasized that Nigeria requires a sustained growth rate of at least 6 per cent annually to achieve meaningful economic transformation.
The NBS report aligns with earlier projections by the World Bank and International Monetary Fund (IMF), which forecast Nigeria’s economy to grow between 3 and 3.5 per cent in 2025, provided that oil production continues to recover and structural reforms remain consistent.
However, downside risks persist. These include:
High inflation and cost-of-living pressures, which may dampen household consumption.
Insecurity in key agricultural zones, affecting food supply.
Global oil price volatility, which could affect government revenue and foreign reserves.
The Federal Government, through the Ministry of Finance and Coordinating Ministry of the Economy, has reiterated its commitment to driving non-oil revenue, strengthening fiscal discipline, and accelerating investments in agriculture and manufacturing to diversify the economy.
Nigeria’s 3.13 per cent GDP growth in Q1 2025 is a positive sign of resilience, but experts warn that deeper structural reforms are needed to translate this growth into improved living standards. Analysts call for stronger policy coordination, aggressive investment in infrastructure, and better security to unlock the country’s full economic potential.