Q1 GDP to Rise Marginally as FX, Bank Reforms Cushion Economy

Nigeria’s Gross Domestic Product (GDP) is expected to post marginal growth in the first quarter of 2025, supported by recovery in sectors previously impacted by exchange rate volatility, resilient non-oil activity, and sustained momentum from the banking recapitalisation programme.

Growth projections range between 3.2 and 3.5 per cent as economic reforms begin to reflect across key macro indicators. Analysts cite improved FX stability, steady energy prices, and a stronger financial sector as factors lifting performance in trade, consumer goods, and telecommunications. However, insecurity, inflation, and continued underperformance in oil and agriculture remain critical constraints.

Vice Chairman of Highcap Securities, Mr. David Adonri, noted that marginal GDP growth may be attributed to improved domestic petroleum production, inflation-driven income adjustments, and early recovery from shocks related to the naira’s floating.

He added that insecurity continues to depress rural agricultural and manufacturing activities.

Managing Director of Rostrum Investment & Securities Ltd, Mr. Olaitan S. Sunday, highlighted a positive trajectory stemming from Q4 2024 reforms, particularly in finance and ICT.

He said the continuation of that momentum is likely in Q1 2025, with recapitalisation lifting financial services and telecoms expanding steadily. Nonetheless, he cautioned that inflation, FX volatility, and security challenges remain headwinds.

While optimism surrounds ongoing reform traction, the broader economic picture remains fragile. Persistent inflation has reduced household consumption, insecurity disrupts food supply chains, and the oil sector continues to grapple with low investment and unstable prices.

The marginal GDP rebound reflects a broader shift from extractive dependence to service-led expansion. Whether this translates into sustained growth depends on how well structural risks are managed in the quarters ahead.