Consumer spending to rise by 6% in 2025 – Report

A new report has projected that consumer spending by Nigerian households will rise by six per cent in 2025 despite heightened inflation in the country.

The report, titled Economic Outlook 2025, published by the Mastercard Economics Institute, also predicts that Nigeria’s gross domestic product (GDP) will grow by 2.9 per cent year-on-year, while inflation will likely slow to 22.1 per cent.

The report said the country’s economic growth would be driven by robust remittance inflows, which sustain household incomes and consumption. According to the report, Nigeria’s economy demonstrates resilience amid global and regional shifts, leveraging its human capital and remittance ecosystem to navigate challenges.

It said 2025 would be defined by shifts in monetary and fiscal policy and a move toward equilibrium rates for growth and inflation.

Commenting on the report, Chief Economist, EEMEA, Mastercard, Khatija Haque, said, “Nigeria’s economic outlook for 2025 highlights the country’s resilience and potential for growth, driven by remittance inflows and consumer spending. These trends underscore the importance of fostering financial inclusion and addressing inflationary pressures to support sustainable development.”

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On her part, Country Manager and Area Business Head for West Africa, Folasade Femi-Lawal, said, “Remittances play a pivotal role in driving economic resilience, and Mastercard Nigeria is committed to enhancing contactless payment solutions to simplify transactions, boost security, and reduce costs.

“Our efforts are aimed at fostering an inclusive financial ecosystem, ensuring seamless, secure payments that support Nigeria’s vibrant economy.”

Key findings from the report include that consumers worldwide have been navigating a bumpy road of rising prices over the last five years, largely driven by the pandemic and geopolitical tensions.

It noted that inflation—the rate of increase in prices—remains a significant challenge for Nigeria, even as consumer price inflation is forecast to moderate to 22.1 per cent in 2025 from over 34 per cent in 2024. This reflects persistent pressures from currency volatility and supply chain disruptions.

“Despite these challenges, Nigeria’s consumer spending is projected to grow by six per cent, driven by the country’s youthful population and robust informal economy,” it said. “However, high inflation continues to influence purchasing behavior, with households prioritizing essential goods and services over discretionary spending.”

Another finding by the report is that over the last few years, there has been significant movement of people and, by extension, capital.

It said that while migration results in a loss of human capital, it also generates substantial remittances, which serve as a lifeline for low- and middle-income communities in developing economies.

According to the World Bank, global remittances surged from $128 billion in 2000 to $857 billion in 2023, with an estimated growth of three per cent in 2024 and 2025.

“Economic recovery and local reforms are expected to sustain remittance growth through 2025, while the continued digitization of the payments industry allows recipients to shift to digital and mobile channels, resulting in considerable cost efficiencies, security, and convenience. In Nigeria, migration continues to shape the country’s economic landscape, contributing significantly to remittance inflows,” the report said.

The rise of digital payments and mobile money solutions has further enhanced the efficiency and accessibility of remittances, reducing costs and ensuring secure, timely transactions. These platforms are vital for Nigeria’s financial inclusion efforts, enabling underserved communities to access financial services and participate in the broader economy.