Nigeria Economic Outlook

August 2025

In this issue:

Mid-year review and updates: H2 2025 economic outlook 

This report provides updates on key issues outlined in our January 2025 outlook, presents our forecast for the second half of the year, and highlights essential actions for government and business leaders to thrive amid current economic challenges and emerging opportunities.

Nigeria’s mid-year economic outlook for H2 2025 underscores a stabilising economy shaped by domestic reforms and global uncertainties. The recent GDP rebasing to 2019 elevated national output to ₦372.8 trillion, with growth of 3.13% in Q1 2025, led by Finance & Insurance, ICT, Construction, and Real Estate sectors.

Inflation eased to 21.9% in July 2025, supported by foreign exchange stability and targeted interventions by the Central Bank of Nigeria (CBN). However, elevated food and transport costs continue to pose challenges for households. The naira has shown signs of stability following CBN’s liquidity support measures, while interest rates remain high as monetary policy remains firmly focused on curbing inflation.

Despite some relief in the debt-to-GDP ratio post-rebasing, fiscal pressures persist. In response, four landmark tax reforms were enacted in June 2025, aimed at streamlining tax administration, enhancing non-oil revenue generation, and expanding fiscal space.

Woman doing taxes.

Key insights from the report:

Nigeria macroeconomic context

  • Nigeria’s total public debt grew by 22.8% year-on-year, from ₦121.67 trillion in Q1 2024 to ₦149.4 trillion in Q1 2025, driven by fresh borrowings, high interest costs and exchange rate depreciation.
  • The CBN maintained the MPR at 27.5% in July 2025, reaffirming its commitment to curbing inflation and 
  • Nigeria’s capital importation rose by 67.1% year-on-year to $5.64 billion in Q1 2025 from $3.38 billion in Q1 2024. Despite this significant growth, about 92% of total inflows was dominated by Portfolio investments, which grew by 150.8% to $5.2 billion. Foreign Direct Investment (FDI) grew by only 6% to $126.29 million.

Economic outlook for H2 2025

  • Nigeria’s GDP is projected to expand modestly by 3.4% in 2025, supported by higher crude oil production and stronger performance in Finance and Insurance, ICT, Construction and Real Estate sectors.
  • Headline inflation is projected to ease to 21.46% in 2025, reflecting tighter monetary policy and improved stability in the foreign exchange market.
  • The naira is expected to remain broadly stable through 2025, supported by ongoing CBN reforms and improved portfolio inflows.

Strategic imperatives for governments and business leaders

  • Strengthen fiscal sustainability: Prioritise debt management by aligning spending with revenue, improving fiscal discipline, and accelerating the implementation of tax reforms to reduce reliance on borrowing.
  • Enhance monetary policy coordination: Maintain a disciplined monetary stance to curb inflation and stabilise the naira, while ensuring that credit flows to productive sectors.
  • Proactively respond to domestic and global risks: Develop adaptive strategies to mitigate geopolitical, trade, and climate-related risks, while leveraging megatrends like AI, digitalisation, and green finance to future-proof the economy.

 

Previous editions

Contact us

Olusegun Zaccheaus

Olusegun Zaccheaus

Partner | West Africa Strategy& Leader, PwC Nigeria

Tel: +234 (1) 271 1700

Omomia Omosomi

Omomia Omosomi

Manager, PwC Nigeria

Tel: +234 2711700

Hide