Nigeria Economic Outlook 2025: H1 Review and H2 Projections

Recent shifts in U.S. trade policy, from tariffs, threats, to unpredictable negotiations, have amplified global economic uncertainty. For emerging markets like Nigeria, the knock-on effects are particularly acute: tighter supply chains, elevated import costs, and a slowdown in global demand. All of these are reshaping Nigeria Economic Outlook 2025’s growth trajectories.

While global trade tensions persist, the country’s economy in H1 2025 reflected both strain and resilience. Inflationary pressure, exchange rate volatility, and debt servicing challenges tested the system. Yet, sectors such as services, energy, and construction showed resilience, helping Nigeria avoid deeper contraction.

African Economic Flashpoints

Across the continent, economic outcomes were mixed in H1 2025:

• East Africa led growth with a 5.9% GDP expansion, buoyed by strong services and cross-border trade under AfCFTA.
• West Africa, including Nigeria, managed 4.3% growth, supported by recovering commodity prices but constrained by high debt-to-GDP (58.8%).
• North Africa performed steadily at 4.3% GDP growth, with Morocco’s tourism sector surging +19%.
• Central Africa faced weaker momentum, expanding just 3.2%, limited by political instability.
• Southern Africa trailed at 2.2%, dragged down by South Africa’s energy crisis and weak investor sentiment.

Across all regions, debt burdens remain heavy, averaging 50-66% of GDP, with FDI inflows uneven. The strongest can be seen in West Africa (US$15bn) and East Africa (US$13bn).

Inflation across Africa moderated to 13.8%, but public debt and currency weakness in Nigeria, Egypt, and South Africa continue to strain fiscal space. By contrast, Ghana’s cedi was the continent’s standout performer following debt restructuring, firmer commodity prices, and central bank liquidity support.

Nigeria Economic Outlook 2025: Key H1 Challenges and Sectoral Resilience

Nigeria’s H1 2025 highlights underline the economy’s delicate balancing act:

• Currency depreciation widened trade deficits and intensified inflationary pressures.
• Debt servicing absorbed significant fiscal resources, limiting government capacity for infrastructure and social programs.
• Inflation, while moderating slightly, still eroded consumer spending power.
• Sectors of resilience included construction, fintech, and agriculture, though insecurity in food-producing states muted gains.

The government’s cautious fiscal adjustments and tighter monetary stance provided some stability, but investment appetite remained subdued, with FDI lagging peers in West and East Africa.

For the remainder of 2025, Nigeria faces a transition defined by both risk and opportunity:

• Debt management: Continued restructuring talks and potential concessional financing will be critical to easing fiscal pressure.
• Currency stabilization: FX reforms and efforts to boost non-oil exports are essential to attract investment and restore market confidence.
• Inflation control: Monetary tightening must be balanced against growth priorities, especially for SMEs.
• AfCFTA opportunities: Deeper regional integration could offset global trade headwinds, particularly in services and manufacturing.

A Cautiously Optimistic Nigeria Economic Outlook 2025

If Nigeria can bridge its critical transition gaps by stabilizing the currency, restructuring debt, and leveraging AfCFTA, the Nigeria Economic Outlook 2025 could shift from cautious to optimistic by year-end. However, in a volatile global environment, this balancing act remains delicate. Ultimately, unwavering prudence in both fiscal and monetary policy will be the essential factor for success.