The Central Bank of Nigeria (CBN) has forecasted a 4.17% economic growth rate for 2025, driven by ongoing reforms and a projected decline in inflation. Speaking at a conference, CBN Governor Olayemi Cardoso expressed optimism that stabilising inflation and foreign exchange (FX) markets would boost investor confidence and real sector growth.
Despite these projections, a PricewaterhouseCoopers (PwC) report, 2025 Nigerian Budget and Economic Outlook,warns that rising inflation, high interest rates, and naira depreciation could push an additional 13 million Nigerians below the national poverty line by 2025. Nigeria’s headline inflation rate currently stands at 34.8%, with food and energy costs exerting pressure on households.
PwC highlighted that macroeconomic challenges—such as inflation, soaring interest rates, and naira instability—are significant contributors to Nigeria’s rising poverty levels. The report predicts a 13-million increase in the number of people living below the poverty line by 2025, underscoring the urgent need for policy interventions.
President of the Manufacturers Association of Nigeria (MAN), Chief Francis Meshioye, also noted that the manufacturing sector has struggled under the weight of high inflation and FX instability, limiting industrial output and job creation.
Governor Cardoso outlined the positive impact of economic reforms introduced by President Bola Tinubu in 2023, including the removal of the petrol subsidy and naira devaluations. These measures, while contributing to short-term inflationary pressures, are expected to drive long-term growth. Oil production is forecasted to rise to 2.3 million barrels per day by mid-2025, with foreign exchange reserves exceeding $40 billion, supported by $6 billion in 2024 inflows.
The CBN aims to improve transparency in the FX market by introducing a code of conduct by the end of January 2025. Cardoso stated, “With limited opportunities for FX arbitrage, we anticipate greater interest in real sector development.”
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, highlighted the government’s ambitious revenue target of N36.35 trillion for 2025. Achieving this, he said, requires broad-based policy alignment and addressing key economic pressures.
Oyedele expressed concerns over the impact of high Monetary Policy Rates (MPR), stating, “The current MPR is contributing to inflation, as businesses are borrowing at higher costs, which drives up prices.” He projected that inflation could drop from 33% in 2024 to 25% in 2025, provided market stability is achieved.
External factors, such as former U.S. President Donald Trump’s proposed oil drilling expansion, could lower global oil prices. While this may reduce inflationary pressure, it poses a revenue trade-off for Nigeria, as oil earnings could decline.
Domestically, increased agricultural investments are expected to lower food inflation, while higher telecom tariffs and rising electricity prices may drive sector-specific inflation in telecommunications and energy.
Experts at PwC’s Executive Roundtable in Lagos emphasized the need for coordinated fiscal and monetary policies to stabilize Nigeria’s economy. Improved revenue generation, debt sustainability, FX stability, and easing inflationary pressures remain critical goals.
Olusegun Zaccheaus, Partner at PwC Strategy, noted that the government’s planned N47.9 trillion expenditure for 2025, including a new minimum wage, could increase inflation. However, price stability in petroleum products may help mitigate some pressures.
As Nigeria navigates these challenges, policymakers are tasked with balancing economic growth, inflation control, and poverty alleviation to ensure sustainable development.
