Nigeria’s Economic Outlook: Reform Momentum and Rising Investor Confidence

The Nigerian economy has demonstrated renewed resilience and reform-driven momentum over the past year, outperforming many peers across sub-Saharan Africa. In 2024, Nigeria’s GDP grew by 3.8%, surpassing the regional average of 3.0%, and the International Monetary Fund (IMF) has revised its 2025 growth forecast upward to 3.5%. A major boost to investor confidence came in May 2025, when Moody’s Investors Service upgraded Nigeria’s sovereign credit rating from Caa1 to B3, with the outlook adjusted from “positive” to “stable.” The upgrade reflects significant progress in fiscal consolidation, foreign exchange reform, and external debt management, all of which have helped to stabilize Nigeria’s macroeconomic fundamentals. To address fiscal and monetary pressures, the Nigerian government has implemented wide-ranging reforms, including a ₦6.2 trillion economic stimulus plan targeting infrastructure, agriculture, and digital innovation; the removal of petrol subsidies; and the unification of the exchange rate by the Central Bank of Nigeria (CBN), which has helped stabilize the foreign exchange market. In a significant milestone, Nigeria repaid its $3.4 billion IMF COVID-19 loan in full by April 2025, signalling improved fiscal discipline and external liquidity. Inflation, while still elevated, has shown signs of easing from a peak of nearly 30% to around 23–24%. Interest rates remain high, but long-term yields have begun to moderate, falling to 17.8% in April 2025 from 18.5% in February. At the same time, Nigeria continues to explore a potential $5 billion oil-backed loan from Saudi Aramco to further bolster liquidity. As the country strengthens trade ties under the AfCFTA and with key Asian economies, it is also implementing domestic reforms that support inclusive growth, job creation, and private investment. President Bola Tinubu’s administration has introduced a sweeping portfolio of interventions, many of which are already yielding tangible results:

Key Programs & Achievements Under President Tinubu

1. National Credit Guarantee Company Launched in May 2025 with an initial ₦100 billion, the NCGC is a federally backed entity designed to reduce the risk profile of loans to MSMEs, agribusinesses, and young entrepreneurs. It plays a critical role in encouraging bank lending by providing government guarantees across key sectors.

2. CREDITCORP

CREDITCORP is a distinct public–private initiative focused on retail consumer credit. It underwrites credit for items such as education loans, home appliances, vehicles, and working capital, targeting inclusion for middle‑and lower‑income households.

3. Nigerian Education Loan Fund (NELFUND) The Student Loan Act, signed into law in 2024, created NELFUND, which has already disbursed over ₦54 billion to more than 500,000 students in 198 institutions. It ensures tuition support for students in public tertiary institutions through a fully automated application and disbursement process. 4. Compressed Natural Gas (CNG) Transition Program In response to rising petrol prices and climate concerns, the government rolled out a national CNG transition program. Over 50,000 vehicles have been converted so far, with a target of 250,000 by mid‑2025 and 1 million by 2027. This initiative is backed by over $450 million in public–private investments and is expected to reduce public transport costs by as much as 50%. 5. Infrastructure Investment and Renewal Under the Renewed Hope Infrastructure Fund, the government is financing 14 key highway projects, including the Lagos–Calabar Coastal Highway (700 km, first 30 km launched May 2025), Abuja–Kaduna–Zaria–Kano, Sokoto–Badagry, Benin–Warri, Lekki Deep Sea Port Road, and the Third Mainland Bridge upgrade (solar lights and CCTV). 6. Fibre‑Optic Network Rollout The government’s Project Bridge plans a $2 billion, 90,000 km expansion of fibre‑optic infrastructure starting in Q4 2025, alongside 7,000 telecom towers, targeting 98% coverage. 5.     Tax Reform and Local Government Autonomy Four tax reform bills are before the National Assembly: Nigeria Tax Bill, Tax Administration Bill, Revenue Service Establishment Bill, and Joint Revenue Board Bill. Key provisions include maintaining VAT at 7.5%, reducing CIT to 27.5%, progressive PIT relief, input VAT recovery, and the creation of a Nigeria Revenue Service and Tax Appeal Tribunal. 6.     Special Agro‑Processing Zones and Livestock Development In partnership with the African Development Bank, Nigeria launched six Special Agro‑Processing Zones (SAPZs) and adopted a national livestock strategy to address herder–farmer conflict and protein sufficiency. 7.     Improved Trade Balance In Q1 2025, Nigeria recorded a trade surplus of ₦5.17 trillion, a 51% increase over Q4 2024, driven by increased crude oil and refined product exports. 8.     Higher Oil Production Oil output rose to 1.56 million barrels per day in Q2 2025, the highest in two years, supported by improved JV cash call funding and Delta security. 9.     Reduction in Petrol Importation

Petrol import bill dropped 75.5%, saving ₦3.7 trillion in Q1 2025 due to increased domestic refining.

10.  Clearance of Airline Blocked Funds

The CBN cleared over $700 million in trapped airline funds, restoring confidence in aviation and FX payment systems.

11. Rising Foreign Exchange Reserves

FX reserves climbed to $38.9 billion (May 2025); net reserves reached $23.1 billion, the highest level in three years.

12.  Expanded Power Generation

Power generation rose to 5,800 MW in early 2025; the government targets 10,000 MW by 2027, with ongoing investment in transmission, solar mini‑grids, and rural electrification.

President Tinubu’s reform agenda is bold, layered, and increasingly effective. While Nigeria continues to face structural challenges—high inflation, weak local government capacity, and global headwinds—the government’s commitment to fiscal discipline, structural reform, and public investment is reshaping the country’s economic narrative. If current momentum is sustained, Nigeria may well be on its way to unlocking inclusive, long‑term prosperity.