Nigeria’s economy demonstrated strong resilience in 2025, achieving a measure of macroeconomic stabilisation that has positioned the country for improved growth prospects in 2026, according to a comprehensive review by the Centre for the Promotion of Private Enterprise (CPPE).
The report identified exchange rate stability as the most notable achievement of the year, with the naira trading consistently within the N1,440–N1,500 band against the United States dollar. This stability restored business and investor confidence, helping to ease the imported inflation pressures that had weighed heavily on the economy in previous years.
Inflation also moderated significantly during the year. Headline inflation, which stood at 24.48 per cent in January, declined to about 14.45 per cent by November 2025, driven by currency stability, improved supply conditions, and reduced logistics pressures.
The easing inflation environment supported a gradual recovery in consumer sentiment, with prices of several food items and imported goods recording noticeable declines.
Dr Muda Yusuf, Chief Executive Officer of CPPE, described 2025 as a year of stabilisation that laid a solid foundation for sustainable growth.
“Business confidence strengthened materially throughout the year,” Yusuf said, noting that the NESG–Stanbic IBTC Business Confidence Index remained positive for most of 2025. According to him, many firms that posted losses in 2024 returned to profitability, underscoring the tangible benefits of macroeconomic stability.
However, the report noted that federal fiscal performance presented a mixed picture. Despite broader stabilisation, government revenues fell short of projections, largely due to weaker-than-expected performance in the oil sector.
The 2025 Federal Budget was anchored on oil prices of $75 per barrel and production of 2.06 million barrels per day, but average prices hovered around $66 per barrel, while output averaged about 1.66 million barrels per day.
As a result, the projected N41 trillion revenue target was significantly missed, constraining capital expenditure implementation.
Debt servicing remained a major challenge, consuming a large share of available resources and limiting fiscal space for development spending, thereby weakening overall budget execution at the federal level.
In contrast, sub-national governments recorded relatively stronger fiscal outcomes. According to the report, states benefited from improved liquidity, stronger internally generated revenue performance, and better capital project execution, resulting in more visible delivery of infrastructure and social services.
Sectoral analysis showed that the services sector remained the main driver of economic growth, accounting for about 53 per cent of GDP by the third quarter of 2025. Growth in telecommunications, financial services, trade, construction, and real estate propelled a 4.14 per cent expansion in the sector.
The non-oil sector contributed 96.56 per cent of GDP, growing by 3.91 per cent, reinforcing evidence of Nigeria’s gradual structural shift away from oil dependence.
Manufacturing, however, remained fragile, posting modest growth of 1.25 per cent and contributing 7.62 per cent to GDP. The sector continued to face challenges, including power shortages, high logistics costs, weak access to finance, import competition, and elevated operating expenses.
The agriculture sector recorded marginal improvement, growing by 3.79 per cent and contributing 31.21 per cent to GDP. Nevertheless, insecurity, low productivity, and post-harvest losses continued to limit its capacity to drive exports and fiscal revenues.
Looking ahead to 2026, CPPE expressed cautious optimism, projecting GDP growth of between 4.0 and 4.5 per cent.
The outlook anticipates a transition from stabilisation to growth, supported by continued inflation moderation, exchange rate stability, and stronger performance of the non-oil economy.
