Nigeria’s economic outlook is set for a stronger finish to 2025 as new projections from CardinalStone Research forecast a rebound in national output.
The firm anticipates that the country’s Gross Domestic Product will climb to 4.22 per cent in Q4 2025, up from the 3.98 per cent recorded in Q3.
If realised, this would position the final quarter as the strongest performance of the year, offering renewed optimism after months of mixed macroeconomic indicators.
The forecast was contained in CardinalStone’s Macro Research Note released on Tuesday, following the latest GDP figures published by the National Bureau of Statistics (NBS).
Nigeria’s economy grew by 3.98 per cent in Q3 2025, slightly outperforming the 3.86 per cent growth posted in the corresponding period last year, but falling short of the 4.23 per cent growth recorded in Q2 2025.
GDP Expected to Rebound 4.22% in Q4 –Report and What Is Driving the Surge
CardinalStone analysts stated that the marginal slowdown in Q3 was expected due to softer oil production levels and the fading of favourable base effects that previously supported higher growth.
However, they emphasised that several indicators now point to a notable expansion in Q4, reinforcing the projection that GDP expected to rebound 4.22% in Q4 is not merely optimistic but data-driven.
According to the report, the latest Purchasing Managers’ Index (PMI) reading for November 2025 showed broad-based expansion in business activities across key sectors.
The PMI has historically served as a reliable predictor of short-term GDP performance, and the strong November reading suggests robust output ahead of the final quarter.
CardinalStone noted that
“the recently released PMI numbers for November 2025 showed a strong and broad-based expansion in aggregate economic activities.
We perceive that this robust output is likely to translate into strong GDP numbers for Q4’25. With macroeconomic conditions improving, we expect this to further filter into GDP performance.”
The analysts projected that the anticipated rebound would drive full-year growth to 3.92 per cent, reflecting strengthened activity in both oil and non-oil contributors.
Oil Output Dragged Q3, But Recovery Is Expected
Nigeria’s oil sector continued to battle output constraints in Q3 2025. Production slipped slightly to 1.64 million barrels per day, down from 1.68 mb/d recorded in Q2.
The drop was attributed to scheduled maintenance at major upstream facilities as well as delays in operational take-off at OMLs 71 and 72.
Despite the underperformance, analysts believe the sector will recover modestly in Q4, boosted by the resumption of key operations and improved security at critical production corridors.
However, the larger story of 2025 remains the strengthening of the non-oil economy.
Non-Oil Sector Drives Broader Stability
The non-oil sector—which has increasingly become the backbone of Nigeria’s growth—posted stronger results in Q3, benefitting from currency appreciation and moderating inflation.
These improvements supported domestic consumption, especially in the trade sector, which recorded faster growth.
Financial institutions were among the biggest winners in Q3, driven by elevated Open Market Operations (OMO) rates that averaged 28 per cent.
Banks also earned significantly higher fees and commissions in the period, boosting sectoral contributions to the GDP.
In contrast, the ICT sector slowed, partly due to the continued deactivation of SIM cards not linked to the National Identification Number (NIN).
The disruption in telecom lines impacted subscriber growth and curtailed the sector’s recent run of double-digit expansion.
Agriculture, however, showed the strongest improvement, posting its highest growth in 14 quarters.
The onset of the harvest season, combined with improved output and favourable weather conditions, strengthened the sector’s performance significantly.
Manufacturing remained the weakest link in the non-oil economy, with companies reporting lower credit access due to elevated borrowing costs.
Banking credit to the private sector dropped compared to Q2, underscoring persistent challenges in the production sector.
Other Analysts Align With the Forecast
CardinalStone’s projection closely mirrors that of Stanbic IBTC Bank’s equity research unit.
The bank’s Head of Equity Research for West Africa, Muyiwa Oni, stated in its latest PMI report that the Nigerian economy is on track to expand by 4.0 per cent in 2025, supported by improvements in manufacturing, services, infrastructure rollout, and policy interventions.
Oni added that the Dangote Refinery will continue to create forward-linkage benefits for other sectors, while lower interest rates expected in 2026 could boost private consumption and investment.
Comercio Partners described the Q3 performance as a “two-speed economy,” noting that while non-oil sectors are anchoring growth, the oil sector continues to face operational bottlenecks.
The investment firm warned that future GDP outcomes will hinge on improvements in oil production, the resilience of non-oil activities, and the transmission of monetary policy decisions into real economic activity.
Meristem Securities also projected a stronger Q4, forecasting 4.08 per cent growth year-on-year, and a full-year 2025 GDP of 3.88 per cent.
With the final quarter historically serving as Nigeria’s strongest due to increased trade, travel, and consumer spending during the festive season, the projection that GDP expected to rebound 4.22% in Q4 appears consistent with seasonal economic patterns and current macro indicators.
If realised, it will mark a significant turning point for an economy navigating persistent inflationary pressures, oil sector volatility, and global headwinds.
