As the first quarter of year 2025 draws closer, stakeholders in the Nigerian economy have continued to engage the government in different capacities ranging from offering projections, analysis and suggestions.
In most cases, such suggestions come after a careful review of local and global developments in relation to government’s policy initiatives and their implementations.
While divergent views may often emerge, pondering on opposing perspectives could as well turn out to be an aid in turning the critical curve required to safely recover from the looming crisis, especially, when such suggestions are coming from institutions or individuals with unbiased desire from the economic wellbeing of the country.
One of such proactive projections for governments across the globe is contained in KPMG in a report titled “The Great Reset, Emerging Trends in Infrastructure and Transportation.”
It warned that the global community is entering into an era of uncertainty as social expectations and norms are being reset.
Speaking of the new trends, Richard Threlfall, Global Head of Infrastructure, Government and Healthcare, KPMG International, said, “We are in the midst of a Great Reset. Protections of national interests are at the top of the agenda. Economies are being reshaped. Alliances and supply chains are being rewired. The frequency and severity of weather events are increasing. And social expectations and norms are being revised.”
He warned that in the midst of the ongoing fundamental change, decision-makers will need to be clear-sighted and willing to take risks.
“Big decisions will need to be made – often quickly and on incomplete information. And those who stare too long at the problem will likely find themselves left out of the solution. Collaboration skills are becoming more important. Visionary leaders are needed,” he stated.
Emerging threats to Nigeria’s economy due to global reset
Last week the International Energy Agency warned of the possibility of increase in global oil supply, projecting that supply will exceed demand by approximately 600,000 barrels per day (bpd) in 2025, posing a serious risk of oversupply in the market.
Nigeria’s 2025 budget is built on the assumption of oil production at 2.06 million barrels per day (bpd), an oil price of $75 per barrel, and a revenue target of N36.35 trillion, with 56 percent expected to come from oil sales.
Interpreting the implication of crude oversupply in the global market to the Nigerian economy, an Abuja based energy expert, Adiola Adigun warned that the threat to the nation’s forex market could be very enormous as the sector remains the main source of foreign exchange earners.
He advised the government and policy makers to take the IEA projection seriously and map out strategies to strengthen the local currency, the Naira.
Emphasizing the need to be proactive, he said, “If the global economy enters a recession and they do not need a lot of oil, it will affect everyone in Nigeria. And if Russia is normalized with sanctions removed, enabling it to enter the mainstream oil market, the equilibrium will shift.”
He called on the Nigerian government to have alternative plans as he anticipates that with the political developments in Rivers State if not handled carefully could hinder crude oil production in the Niger Delta region in the face of imminent global threat to the commodity.
“The year 2025 may turn out to be a very interesting year for Nigerians as the country’s main source of income faces threats from the global market and back home. The implication is the possibility of more Nigerians sliding into the poverty bracket if our policy makers don’t take the warnings from experts and players seriously.”
According to Adigun, the way out is for the government to diversify the economy, encourage local refining of crude oil and export of petroleum products to other African countries among others.
He identified agriculture as a sector that can help bring about quick wins, stressing that it will bring about food security, employment and increase earnings as exports of both proceeds from food items and raw products will improve the country’s gross domestic products.
NESG worried over uncertainty in private sector growth in 2025
Like other concerned parties, the Nigerian Economic Summit Group, a foremost private sector initiative on Thursday launched the 2025 Private Sector Outlook, x-raying key economic trends, challenges, and opportunities for businesses navigating the evolving Nigerian economy.
In addition, the platform provided insights into macroeconomic conditions and strategies for private sector resilience. However, participants at the event were equally convinced of the emerging trends cumulating in recession.
They therefore tasked policy makers to initiate investor friendly policies to avert the looming danger of economic recession.
In her opening remarks, NESG Board Director, Mrs. Wonu Adetayo, emphasized the vital role of the private sector in shaping a resilient economy.
She noted that despite structural weaknesses and macroeconomic volatility, Nigeria experienced an economic growth improvement in 2024, driven by reform efforts that enhanced investment levels. But she did not fail to emphasise that stagnant productivity and persistent macroeconomic imbalances caused by the reform policies initiated by the current government led to deteriorating living standards for citizens and heightened economic distress.
Supporting her views with data, Mrs. Adetayo pointed out that the country’s economy expanded by 3.4 percent in 2024, the highest growth since 2021, with the number of expanding activity sectors increasing from 32 in 2023 to 38 in 2024. She attributed the economic stabilization to key reforms, such as fuel subsidy removal and exchange rate harmonization.
But she also noted that inflationary pressures remain a concern.
She noted that as a result of the rebasing of the Consumer Price Index by the National Bureau of Statistics, headline inflation declined from 34.8 percent (using the old base year) to 24.5 percent (using the new base year) in January 2025.
“Nevertheless, month-on-month inflation increased significantly, signaling persistent economic challenges,” she stated.
In his presentation, Chief Economist and Director of Research at NESG, Dr. Segun Omisakin, provided an in-depth analysis of the private sector’s performance and economic risks in 2024.
He noted that while foreign exchange availability improved due to policy reforms, Nigeria’s currency depreciated significantly, with the official exchange rate averaging N1, 479.9 to the U.S. Dollar in 2024.
“Trade surpluses and increased foreign capital inflows were recorded, yet fiscal constraints persisted, with public debt rising to 142.3 trillion Naira as of September 2024,” he said.
Omisakin highlighted the struggles faced by Nigeria’s private sector, including foreign exchange shortages, insecurity, inadequate infrastructure, and limited market access. He pointed out that between 2023 and 2024, multinational divestments and business closures led to an estimated N94 trillion economic loss.
Additionally, 30% of Nigeria’s 24 million registered MSMEs shut down during this period, underscoring the country’s economic vulnerability.
Looking ahead to 2025, Omisakin stressed the need for businesses to adapt to economic uncertainties and employ strategic measures for growth and resilience.
He outlined NESG’s framework of economic stabilization, consolidation, and acceleration, emphasizing the importance of monitoring reform efficacy and implementing policies that enhance private sector competitiveness.
Economic challenges and insights
Meanwhile, panelists at the NESG event took time to review the country’s ongoing economic reforms.
Discussants acknowledged the impact of currency depreciation, policy instability, and global market trends.
A major concern highlighted was the lack of immediate monetary interventions following the removal of the fuel subsidy, which exacerbated inflationary pressures. Inconsistent customs regulations and fluctuating exchange rates were also identified as deterrents to investment and operational stability for businesses.
Panelists noted that foreign direct investors prioritize policy stability over the exchange rate itself, emphasizing that investors are willing to engage regardless of currency value, as long as policies remain consistent. This was evident in discussions with potential investors in Qatar, where concerns about unpredictable market conditions hindered commitments.
Need for private sector inclusion in policy formulation
The panelists called for stronger collaboration between the public and private sectors, stressing that business associations like the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small-Scale Industrialists (NASSI), and the Nigeria Employers’ Consultative Association (NECA) must be actively involved in economic decision-making.
They warned against government overreach into private sector affairs, urging policymakers to recognize business organizations as essential stakeholders in negotiations on trade and investment.
“Government must act as a facilitator, not a competitor, in economic affairs. Business organizations should always be in the room when key negotiations take place to ensure broad-based economic benefits,” Dele Kelvin Oye, President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture and Chairman, Organised Private Sector of Nigeria, stated.
Call for policy stability, economic certainty
The discussion further emphasized the importance of policy consistency, citing the example of tariff policies in the United States and their immediate impact on financial markets.
It was argued that unpredictable policies deter investments and disrupt market confidence.
Panelists also highlighted the challenges posed by law enforcement inefficiencies and regulatory bottlenecks, which hinder business competitiveness. They called for legal reforms and improved regulatory clarity to foster an environment conducive to investment and business expansion.
The NESG’s 2025 Private Sector Outlook serves as a strategic guide for businesses, policymakers, and investors navigating the economic landscape. It provides a roadmap for fostering a stable and competitive business environment, ensuring that Nigeria’s private sector remains resilient and contributes to sustainable economic growth.
Need for urgent economic reset
Interrogating the submission of Omisakin of NESG’s position on the economy, chairman of Tekedia Capital, Ndubuisi Ekekwe, expressed worries over the situation saying the implication is that over 7.2 million businesses closed between 2023 and 2024 due to harsh business climate.
“Dr. Segun Omisakin’s presentation showed that between 2023 and 2024, multinational divestments and business closures led to an estimated N94 trillion economic loss. Additionally, 30% of Nigeria’s 24 million registered MSMEs shut down, underscoring the country’s economic vulnerability,
“In other words, 7.2 million businesses closed down between 2023 and 2024 due to the harsh business climate,” he stated.
He noted that the figures quoted will reset any economy. He emphasized the urgent need to introduce policies that can stimulate production and consumption in order to stabilize the economy.
On how to resolve the looming crisis, he said, “My position remains that Nigeria needs to deploy massive subsidies in the economy (yes, I am a Keynesian democrat and I like subsidies and stimulations) as without massive subsidies and investments, Nigeria could have a lost decade. If I am in Aso Rock right now, among others, I will ask the government to stimulate the economy via these three policies.”
Offering practical short to medium term steps solving the issues, he said, the government should commit at least $3 billion to build a deep seaport in the Akwa Ibom area that will connect the seaport all the way to Aba and Onitsha via railway. “This must start immediately and that will open economic lives in the region,” he said.
He charged the government to deploy a purchasing guarantee on processed agro-products to the tune of $5 billion with Maiduguri and Kano declared free agro processing zones.
“The government will commit to buy from your factory any processed agro produce from any factory engineered for export. This will stimulate agro production while removing briefcase farmers as you have to have the goods before you can get the guarantee,” he added.
Ekekwe urged the Federal Government to waive all taxes on profits and gains on venture investments for a decade.
“This will get many fund managers to station funds in Nigeria. We can attract $50 billion within a decade and Lagos will rule Africa,” he said.
Government’s claims of reshaping economy
The Federal Government on its part appears to be listening to the demand of the private sector, at least in terms of discussion of critical issues raised in recent times.
For instance the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, recently called for unity in fiscal management, as a way of reshaping the nation’s economy.
Speaking at a retreat in Abuja last week, Edun said the government is committed to asset optimisation and increased private-sector investment.
The Minister added that through closer collaboration, “we are refining budgetary processes, increasing transparency, and ensuring better resource allocation to drive long-term economic stability.”
Edun highlighted significant economic progress in recent months, citing a 3.40% GDP growth in 2024, improvements in oil production, and enhanced revenue collection.
He noted that these achievements were largely due to key fiscal reforms, including petrol subsidy removal, tax policy enhancements, and digital revenue automation.
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 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.”
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. However, high inflation continues to influence purchasing behavior, with households prioritizing essential goods and services over discretionary spending,” it said.
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.
