PwC Nigeria has projected Nigeria’s Gross Domestic Product (GDP) to grow by 3.4 per cent in 2025, building on the 2.7 per cent growth recorded in 2024.
This growth is primarily supported by higher crude oil production and strengthened performance in key sectors, including finance & insurance, ICT, construction, and real estate.
Nigeria’s recent GDP rebasing to 2019 has elevated the national output to ₦372.8 trillion, with Q1 2025 growth recorded at 3.13 per cent.
“Nigeria’s GDP is projected to expand modestly by 3.4% in 2025, supported by higher crude oil production and stronger performance in finance and insurance, ICT, construction, and real estate sectors,” the report stated.
PwC stated in its Mid-year Review and Economic Outlook for 2025 that headline inflation is projected to ease to 21.46 per cent in 2025, down from 33.4 per cent in 2024, reflecting tighter monetary policy and improved stability in the foreign exchange market.
The firm said the naira is expected to remain broadly stable through 2025, supported by ongoing CBN reforms and improved portfolio inflows.
Nigeria’s capital importation rose by 67.1 per cent year-on-year to $5.64 billion in Q1 2025 from $3.38 billion in Q1 2024. Despite this significant growth, about 92 per cent of total inflows were dominated by portfolio investments, which grew by 150.8 per cent to $5.2 billion, with Foreign Direct Investment (FDI) rising by only 6 per cent to $126.29 million.
The firm said the dominance of FPI over FDI raises concerns about macroeconomic stability and medium- to long-term development, as it only implies that investors are only interested in short-term investments.
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On capital market performance, the outlook said the NGX is expected to maintain its positive momentum in H2 2025, “supported by ongoing banking sector capital raises, moderation in fixed-income yields, fiscal policy reforms, and sustained foreign exchange stability.”
Despite some relief in the debt-to-GDP ratio after the rebasing exercise, fiscal pressures persist. This was attributed to a high debt service to revenue ratio.
Nigeria’s total public debt grew by 22.8 per cent year-on-year to ₦149.4 trillion in Q1 2025, driven by fresh borrowings, high interest costs, and exchange rate depreciation.
The Central Bank of Nigeria (CBN) has maintained the Monetary Policy Rate (MPR) at 27.5 per cent in July 2025, reaffirming its commitment to curbing inflation. However, it said that as inflation moderates, interest rates may begin to decline in the second half of 2025.
It noted that the four landmark tax reform laws signed in June 2025 are aimed at streamlining tax administration, enhancing non-oil revenue generation, and expanding fiscal space.
Commenting on the poor performance of some sectors as indicated in the Q1 2025 GDP report, PwC Partner and Chief Economist for West Africa, Olusegun Zaccheus, said they require long-term structural reforms to bring down the cost of production.
According to the GDP report, agriculture (0.07 per cent) and manufacturing (1.69 per cent) recorded the slowest growth in Q1 2025.
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Zaccheus, who featured on Arise News Global Business Report on Wednesday, said the authorities should pay attention to sectors with high growth potential in the medium term while investing in structural reforms to boost agriculture and manufacturing in the long term.
PwC made some strategic recommendations, which include strengthening fiscal sustainability, enhancing monetary policy coordination, leveraging technology and artificial intelligence, diversifying funding sources for critical projects, and addressing brain drain in the country.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
