Will 2025 be the year of real change or more of the same?

Nigeria’s economy is once again caught in a recurring pattern: a jubilant uptick in the last quarter, followed by a depressing first-quarter decline. This trend, which is ten years old, is a reflection of both economic seasonality and a basic breakdown in strategic planning and financial restraint.

“It reveals a preference for short-term fixes over long-term solutions, a reluctance to challenge vested interests, and a failure to prioritise the well-being of the Nigerian people.”

The Lagos Business School’s February 2025 report forecasts GDP growth to decline from 3.8 percent in Q4 2024 to 3.6 percent in Q1 2025. Such fluctuations may be dismissed as cyclical, but the underlying drivers—fiscal recklessness, inflationary pressures, and structural inefficiencies—suggest deeper vulnerabilities.

For over a decade, the first quarter of each year has served as an economic reality check. December’s consumer spending frenzy—driven by festive indulgence, increased government outlays, and a surge in commercial activity—inevitably gives way to January’s austerity. Policymakers and business leaders cite seasonality as an explanation, yet fail to address the root cause: the government’s habitual tendency to concentrate spending in the final quarter rather than distributing it strategically across the fiscal year.

Instead of fostering sustainable economic activity, Nigeria’s financial management remains reactionary, with ministries and agencies emptying budgets before year-end, fuelling a temporary boom. By January, fiscal activity slows to a crawl, businesses hesitate to invest, and economic momentum dissipates. This cycle is not a law of nature—it is a product of short-termism and weak governance.

Beyond seasonal stagnation, inflation remains a significant impediment. At 34.8 percent in December 2024, it has severely eroded purchasing power, rendering any projected easing to 33.12 percent in Q1 2025 marginal at best. With borrowing costs still exorbitantly high—the Monetary Policy Rate at 27.50 percent—both businesses and consumers remain constrained.

Meanwhile, the naira’s volatility persists. Despite the Central Bank’s interventions, which have propped up the official exchange rate from N1,535/$ to a projected N1,400/$ in Q1 2025, the parallel market continues to tell a different, more alarming story. Nigeria’s trade balance, expected to contract from N5.81 trillion in Q4 2024 to N4.93 trillion in Q1 2025, further underscores the economy’s fragility.

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The most damning aspect of this recurring economic slump is that it is entirely preventable. For years, economists have advocated for structural reforms—diversifying beyond agriculture and festive-driven consumption, ensuring a more predictable fiscal expenditure framework, and crafting policies that support long-term economic stability. Yet, each new year finds Nigeria grappling with the same issues, as if condemned to an endless loop of economic déjà vu.

This cyclical pattern underscores a critical lack of political will to implement meaningful change. It reveals a preference for short-term fixes over long-term solutions, a reluctance to challenge vested interests, and a failure to prioritise the well-being of the Nigerian people.

Breaking this cycle requires more than just acknowledging the problems; it demands a fundamental shift in approach. This includes fostering a more inclusive and transparent governance system that prioritizes accountability and citizen engagement.

It also necessitates investing in education and skills development to create a more diversified and competitive workforce.

Furthermore, it requires building robust infrastructure to support sustainable economic growth and attract foreign direct investment.

Until these fundamental issues are addressed, Nigeria will remain trapped in this cycle of boom and bust, squandering its potential and jeopardising the future of its citizens.

If the government is serious about fostering sustainable growth, it must move beyond reactionary policies. A more balanced budgetary approach, investments in manufacturing, technology, and service sectors, and disciplined monetary policy are imperative. Without these, the nation will continue its ritual of fourth-quarter euphoria followed by first-quarter malaise.

The question remains: Will 2025 mark a decisive shift, or will history repeat itself yet again? Time is running out for incremental fixes—Nigeria needs bold, structural change, and it needs it now.