Agric, Oil & Gas, 4 Others To Boost Nigeria’s Economy In 2025

Afrinvest’s Nigeria Economic and Financial Market Review of 2024 and 2025 Outlook has projected that six major sectors are poised to boost the Nigerian economy this year.

The firm, which is involved in investment banking, securities trading, asset management, trust services, consultancy, and technology, forecast a modest recovery in 2025, supported by stabilising inflation and improved global demand, amid persistent risks from geopolitical tensions and climate change.

According to the report “Beyond the Rhetorics: Transforming Reforms to Tangibles,” the sectors that will aid Nigeria’s economic growth are agriculture, oil & gas, consumer goods, industrial goods, banking and telecommunication.

Afrinvest forecasts that Nigeria’s economic prospects will be largely hinge on the proposed tax reforms and effective implementation of the tax reforms would help unlock about N7.5 billion annually, which are essential for fiscal sustainability in 2025.

“The reforms would be pivotal to revitalising the currently challenged fiscal capacity evidenced by the jump in national debt-to-GDP ratio to N138 trillion and 58.3 percent in 11 months of 2024 from N97.3 trillion and 40.1 percent in 2023 respectively,” the report said.

It highlighted that the banking sector recapitalisation exercise remains vital to achieving Nigeria’s $1.0 trillion economy ambition by 2030.

“The positive spillovers from a successful banking sector recapitalisation in 2025 would include wealth and job creation across other sectors of the economy as well as the attraction of foreign capital to the economy,” the report added.

At the end, Nigerians would be keen to see the transformation of the several reform rhetorics of the government to tangible outcomes beginning in 2025 as further delay could be devastating.

Here are six key sectors that will drive Nigeria’s economic growth in 2025

The agriculture sector is positioned for a positive performance in 2025, anchored on the successful completion of strategic investments by major players in 2024, growing domestic and regional demand for output, and planned intervention by the federal government including tariff waiver on equipment importation.

The Oil & Gas sector should remain upbeat despite expected moderation in global energy prices. Afrinvest expects the FX balance sheet and stimulating corporate activities to keep the narrative compelling around the sector.

The consumer goods sector’s near-term outlook remains cautiously optimistic with several domestic and global challenges likely to impact growth, inflationary pressures, FX volatility, and geographical factors are expected to continue influencing consumer spending patterns.

The industrial Goods sector outlook is positive, buoyed by an expectation that moderating inflationary and FX pressure should translate to firmer business performance, even as FG’s infrastructure investment remains supportive.

The banking sector outlook is largely positive as highlighted in our 2024 Banking Sector Report supported by expected ESP growth and balance sheet optimization. In 2025, Afrinvest expects banks to make significant progress from the recapitalisation exercise which would lead to positive investor sentiment in the sector supported by a much more stable regulatory environment.

The telecom sector is expected to remain under pressure from FX dynamics which will strain operational costs and profitability. However, strategies such as renegotiations of existing tower lease agreements and upward review of tariffs in Q1 2025 would aid telecom giants in combating the challenging environment.