When Nigeria’s GDP was recalculated using revised benchmarks at the beginning of 2025, the economy grew by about 30%, reaching ₦372.8 trillion ($244 billion).
Additionally, this rebasing reduced the debt-to-GDP ratio to roughly 40%, increasing debt transparency and possibly opening up new funding sources.
Growth has returned, albeit slowly: in Q1 2025, the GDP grew by 3.13% year over year, driven primarily by a thriving services sector, while oil production remained steady at 1.5–1.6 million barrels per day.
The World Bank provides a somewhat more optimistic forecast of 3.6% real GDP growth in 2025, which is still below the government’s 4.6% target but highlights the emerging reform dividend. The IMF projects real GDP growth of roughly 3.4% in 2025.
Monetary policy continues to be tight notwithstanding these macro benefits. In an effort to drive inflation, which is currently between 22 and 24 percent, toward single digits, the Central Bank has maintained its benchmark interest rate at 27.5% for months.
By substituting a “willing-buyer, willing-seller” digital platform (B-Match) for numerous FX windows, it has also addressed exchange-rate distortion and reduced the parallel market premium to less than 3%. Meanwhile, foreign reserves increased to over $40 billion, which is sufficient to fund eight months’ worth of imports.
Despite little budgetary space, fiscal consolidation is still ongoing. The 2025 budget has drawn a lot of criticism for using too optimistic projections for oil prices and output, overcommitting to ongoing costs, and allocating one-third of earnings to debt repayment, which reduces the amount of money available for social assistance and capital projects.
As part of a larger restructuring, officials have responded by launching a debt optimization framework, repaying a $3.4 billion IMF loan from the COVID era, and giving priority to concessional borrowing.
In order to increase non-oil revenues and enhance tax administration and raise the tax-to-GDP ratio over its current 11% level, four pieces of tax reform legislation were enacted into law in early 2025. As a result, public receipts are increasing.
The IMF stresses ongoing reform discipline toward fiscal credibility and poverty reduction, while the World Bank suggests rerouting subsidy savings into cash transfers and infrastructure.
The government is encouraging investment in vital infrastructure in order to revitalize long-term recovery. A $21 billion external borrowing program has been renewed, with funds designated for housing, national security, healthcare, education, railroads, and highways. A 2,044 km eastern railway corridor is supported by a flagship €3 billion loan, and other projects like the Lagos–Calabar highway are meant to promote regional trade and industrial development.
Nigeria is investing in industrial revitalization in addition to infrastructure. A gas-processing plant will be renovated as part of a $1.2 billion Chinese-backed proposal to boost aluminum output. In order to increase food security, collaborations with Brazil focus on automated farming. In an effort to modernize agriculture and promote rural employment, the AfDB is supporting the establishment of Special Agro-Industrial Processing Zones in 28 states.
Recovery is also driven by the social agenda. Conditional Cash Transfers, N-Power youth employment, microlending (GEEP), and school food programs are some of Nigeria’s social investment initiatives. More than ₦32.7 billion was authorized in early 2025 alone to restructure N-Power and extend assistance to almost 15 million families in order to enhance market connectivity and skill utility.
Deep structural issues still exist, though, as inflation brought on by the removal of subsidies and the liberalization of the foreign exchange market has squeezed household incomes. In rural areas of the Niger Delta, such as Ngwoma, the removal of subsidies left residents confined, and local nurses are now filling the healthcare gap, highlighting an uneven recovery where national gains have not yet trickled down. Nigeria’s potential is still clear, but ambitious growth goals require resolution. Finance Minister Wale Edun has called for doubling growth within a year or two through sustained reform, private-sector dynamism, and industrial diversification. The president’s pledged 6% growth depends on ongoing reforms and increased competitiveness, particularly in non-oil sectors.
The IMF keeps highlighting its top priorities, which include improving revenue mobilization, establishing a transparent and realistic budget framework, strengthening fiscal discipline, and increasing targeted cash transfers to protect vulnerable Nigerians.
Despite impressive growth figures, poverty and food insecurity could impede progress in the absence of these.
