Group Chief Economist at Afreximbank, Dr Yemi Kale, has stated that reaching the projected 3.6 per cent GDP growth in 2025 is heavily dependent on continued policy discipline and reform execution.

In an interview with The Guardian, Kale explained that while the outlook is supported by structural reforms, declining inflation and the anticipated impact of the Dangote Refinery, these factors alone are not enough.

He cautioned that without consistent follow-through on reforms and prudent economic management, the momentum could stall, undermining the country’s medium-term recovery prospects.

Kale pointed out that the Dangote Refinery is a potential game-changer for Nigeria’s economic trajectory, noting that it has fundamentally reshaped the country’s refined petroleum trade balance by reducing import dependency and creating export potential.

However, he stated that the ongoing fiscal and foreign exchange reforms, alongside a declining inflation trend, if maintained, would provide further support to economic activity.

According to him, while Nigeria’s growth outlook is supported by both domestic policy shifts and external developments, sustaining momentum will require discipline on the part of policymakers.

He said: “Afreximbank’s projection for Nigeria’s real GDP is around 3.4 per cent to 3.6 per cent in 2025, while short-term moderation could follow, the medium-term outlook remains positive with average growth expected at four per cent between 2025 and 2029.”

A key growth catalyst, he explained, is the Dangote refinery, which significantly alters Nigeria’s refined product balance by reducing import dependency and enabling exports.

However, he cautioned that the refinery’s actual impact would hinge on operational reliability, consistent crude supply, and how foreign exchange dynamics affect pricing.

Kale also warned that, with inflation still well above single digits, easing monetary policy too soon could undermine the fragile gains made so far.

“The fiscal and FX reforms, coupled with a declining inflation trajectory, if sustained, will support economic activity. But inflation is still well above single digits, and any premature loosening of monetary policy could risk setbacks.”

Turning to the broader African macroeconomic landscape, Kale described Africa as ‘resilient but heterogeneous’.

He noted that while growth has recovered since the COVID-19 and commodity shocks of 2020–2023, the recovery is being tested by three key external forces: high global interest rates that have increased borrowing costs and narrowed fiscal space (though this is beginning to ease), a shifting global trade environment with new tariffs and industrial policy frictions, and ongoing supply-chain disruptions, particularly in food and logistics, caused by climate and geopolitical factors.

Despite these headwinds, Afreximbank expects Africa-wide GDP growth to reach around four per cent in 2025.
However, Kale warned that inflation and external-sector vulnerabilities continue to constrain many countries.

“Central banks and fiscal authorities must balance disinflation with growth, meaning they should avoid easing policy too early unless inflation and reserve buffers are adequately secure,” he advised.

He also urged governments to adopt targeted fiscal tools and pursue reforms that alleviate supply-side pressures.

On regional dynamics, Kale observed that performance varies widely across countries.

According to him, East Africa, especially select markets with strong digital adoption and diversified services, is showing strong resilience.

Parts of North Africa, including Egypt and Algeria, have benefitted from energy revenue buffers, while some West African non-CFA countries are seeing growth momentum driven by reforms and commodity price recoveries.

In terms of sectors, services, particularly telecoms, fintech, and distribution, are expanding rapidly, especially where intra-African trade is growing.

Kale also described the light manufacturing and food processing as bright spots in countries that have invested in logistics and infrastructure.

In contrast, fragile and conflict-affected states continue to lag due to insecurity and poor investment environments, and large oil-dependent economies lacking diversification remain exposed to shocks when oil prices drop or output is disrupted.

Looking ahead, Kale said Afreximbank sees industrialisation, particularly in value-added sectors like agro-processing and energy-linked manufacturing, as a major growth opportunity for Africa over the next 12 to 18 months.

However, he cautioned that risks persist, including inflation, high debt servicing costs, potential capital outflows, and climate shocks that could disrupt agriculture and food supply chains.

“Resilience is concentrated where macro policy, structural reforms, and investment in logistics and energy have converged.