Nigeria’s rebased gross domestic product (GDP) will require 21.95 per cent growth at an N1,500 per dollar exchange rate to achieve a $1 trillion economy target by 2031.
Afrinvest West Africa Limited predicted this in its 20th Nigeria Banking Sector Report 2025, entitled ‘ACT-BOLD: Beyond a Trillion Dollar Economy’, released recently in Lagos.
In a statement on Friday, September 12, to highlight the key points of its latest report, Afrinvest stated that at a nominal GDP size of N372.82 trillion, Nigeria will require a minimum yearly growth rate of 21.9 per cent to attain the $1 trillion economy valuation by 2031.
Similarly, it said an exchange rate of N1,500/$1 or a much stronger exchange rate at a slower growth rate will be required to attain the GDP size milestone.
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According to the investment firm, despite the President Bola Tinubu-led administration’s confidence that the banking industry will support the $1 trillion economy target, there is a need to address longstanding impediments that constrain broad-based growth potential.
Unless this is addressed, Afrinvest said banks will only deliver, at best, uneven growth across a few services-based sectors, while the overall economy continues to grow at a slow pace.
The report also highlighted the role of the Central Bank of Nigeria (CBN) in its monetary policy tightening in achieving subdued inflation rate figures, restoring market confidence and stabilising the forex rate.
It noted that monetary policy under CBN governor Olayemi Cardoso showed successive hikes in the benchmark rate by a cumulative 875 basis points to 27.5 per cent between February 2024 and November 2024.
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It said this, alongside other variables, was left unchanged throughout the first half of this year.
The investment firm also noted that the ongoing recapitalisation of the banking industry has shown that several banks initiated or completed a capital raise to strengthen their buffer.
It further stated that as of mid-2025, its estimate suggests that banks have collectively raised over N2.5 tn through rights issues, public offerings and private placements.
It said at least four lenders – Access Corporation, Zenith Bank, Ecobank and Lotus Bank – reportedly met the new capital thresholds, while several others are on track to meet the June 2026 deadline.
“A few institutions are exploring merger and acquisition options as a compliance strategy. Overall, the growth of the banking sector (proxied by financial institution GDP) has remained resilient, clearing at 15 per cent in real terms in the first quarter of 2025 and ranking among the top 10 contributors to the GDP in the period,” the report stated.
Speaking during the unveiling of the report on Afrinvest’s 30 years of operations, the Group Managing Director, Ike Chioke, said the banking sector report, first published in 2006, remained a trusted compass for policymakers, investors and financial institutions navigating the changes in Nigeria’s economy.
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He described the 20th edition as both a call to action and a framework for Nigeria’s growth.
Pinnacle Daily reports that on July 21, the National Bureau of Statistics (NBS) released the long-awaited rebased GDP figure, stating that it grew by 3.13 per cent year-on-year in real terms in the first quarter of this year from 2.27 in the same period of 2024.
In nominal terms, NBS said GDP grew to N372.82 trillion, or $242.64 billion, as of December 31, 2024, from $187.75 billion.
This, however, has left Nigeria to maintain the fourth-largest economy in Africa in 2024, coming behind South Africa with $400.26 billion nominal GDP, Egypt with $389.05 billion, and Algeria with $263.61 billion, despite rebasing the GDP.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
