Nigeria’s economic growth to remain stable in 2025, say experts

Experts in the country have projected Nigeria’s economic growth to remain stable in 2025, citing stable exchange rate and decelerating inflation.

Speaking at the 2025 Lagos Chamber of Commerce and Industry (LCCI) Economic Review and Outlook Conference, Taiwo Oyedele, chairman presidential committee on Fiscal Policy and Tax Reform said that he expects exchange rates to be stable in 2025 because the factors pushing pressure on the exchange rates have reduced significantly.

“Particularly that we now have local refining capacity and the fact that we have cut out some inflation of consumption that we cannot really verify and the fact that there will be an inflow of foreign exchange (FX) now to the federation accounts.

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“Once you stabilise the economy beyond Foreign Portfolio Investment (FPI), you are going to begin to attract foreign direct investment which is a better indicator of the confidence in the economy because it signifies long term,” Oyedele said.

He further said that rebasing the Gross Domestic Product (GDP) in itself with or without the inclusion of the black economy would mean a lot for the country.

“It will have an impact on our projected tax to GDP ratio, measurement of per capita income whether we are classified as low income, low middle income, or whatever those classifications are.

“Once we are able to rebase the Consumer Price Index (CPI) basket, it will give us a more reliable indication of where things are going,” Oyedele said.

He added that the presidential committee is engaging with key stakeholders and expects that the tax bill should be enacted into law before the end of the first quarter (Q1) of 2025.

Also, Gabriel Idahosa, president of the LCCI stated that the tax reform bill simplifies administration through unified systems and digital platforms, broadens the tax base by removing exemptions and including the informal sector, and promotes equity with progressive measures to increase non-oil revenue by 25 percent by 2026 and income tax revenues by N500 billion annually.

“If passed, these reforms could raise Nigeria’s tax-to-GDP ratio to 11 percent by 2025, improving fiscal stability and reducing dependence on debt financing.

“With the new figures expected after the rebasing, we urge the government to remain focused on driving through the economic reforms towards achieving set goals,” Idahosa said.

He also urged the monetary authorities not to get comfortable with rebased inflation figures if they come out lower than what we currently deal with at 34.6 percent as of November 2024.

“To the fiscal authorities, the rebased figures for our GDP (likely to go higher than current figures) should not give room to more debts supported by the argument of a comfortable debt-to-GDP ratio,” Idahosa noted.

Biodun Adedipe, founder and chief consultant, B.Adedipe Associates Limited (BAA Consult), in his presentation titled Nigeria 2025: Path to Economic Rebound and Recovery at the LCCI conference projected that Reforms will begin to pay off, leading to faster growth, inflation is expected to reach an inflection point in the early part of 2025, causing a potential downward trajectory of the Monetary Policy Rate (MPR).

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“Tightening by CBN, effects of tax reforms (if implemented), and supply-side bottleneck issues tamed should result in a reduced inflation rate.

Also speaking at the LCCI conference, Segun Kadir-Ajayi, director general of the Manufacturers Association of Nigeria (MAN) said that the outlook for the manufacturing sector largely depends on the success of the ongoing economic reforms, which includes the implementation of the proposed tax reforms, stabilisation of the critical economic indicators, targeted investment in infrastructure and technology.

“We therefore, urge the federal government to remove these banking constraints that impede the roots of the economy and expedite action on the reforms to yield the necessary results that Nigerians can benefit from.