By Atoyebi Nike
Nigeria’s economy grew by an estimated 3.7% year-on-year in the first half of 2025, buoyed by a rebound in oil output and stronger performance in the manufacturing and services sectors, according to new insights from Stanbic IBTC’s Purchasing Managers Index (PMI) report.
Drawing from monthly PMI trends and oil production data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the report points to sustained economic recovery across key sectors, despite continued setbacks in agriculture.
“The recovery is driven by higher crude production and improvements across Manufacturing and Services,” the report noted. However, it highlighted that agriculture remains subdued due to persistent insecurity in food-producing areas and erratic weather conditions.
Africa’s largest economy has begun to recover from a painful cost-of-living crisis sparked by sweeping reforms, including fuel subsidy removal and currency liberalization. These policies initially triggered inflationary shocks but are now showing signs of longer-term gains.
With inflation beginning to ease, interest rate cuts are on the horizon, after the Central Bank of Nigeria (CBN) raised its benchmark rate to a record 27.5% to tame inflation.
“We expect a 150 to 200 basis point rate cut in 2025, and 200 to 250 bps in 2026,” said Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC. “Slower inflation, removal of protectionist policies, and reform tailwinds should support medium-term growth.”
Following its strongest annual growth in a decade in 2024 when GDP rose by 3.4%, Nigeria is expected to maintain steady progress. The World Bank forecasts 3.6% growth in 2025, rising to 3.8% through 2027, even as global growth falters under trade tensions and sluggish demand.
While the official full-year GDP forecast for 2025 stands at 3.5%, Stanbic IBTC estimates that with a planned economic rebasing, Nigeria could reach 4.2% real annual growth.
The latest figures offer a cautious optimism that Nigeria’s economy is realigning toward a more resilient trajectory driven by investment, productivity, and policy discipline.
