The Central Bank of Nigeria (CBN) has projected a Gross Domestic Product (GDP) growth of 4.17% for 2025, an increase from the 3.36% growth recorded in 2024. This optimistic forecast is attributed to ongoing fiscal and monetary reforms, stable crude oil prices, and improvements in domestic oil production.
Key Drivers of Growth
CBN Governor Olayemi Cardoso emphasized that the projected growth is underpinned by several factors:
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Economic Reforms: Reforms initiated by President Bola Tinubu in 2023, such as the removal of the petrol subsidy and the devaluation of the naira, have begun to yield positive results. These measures, though initially inflationary, are expected to stabilize the economy in the long term.
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Oil Production: An increase in oil production is anticipated, with output projected to reach 2.3 million barrels per day by mid-2025. This boost is expected to enhance foreign exchange reserves, which surpassed $40 billion in 2024.
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Inflation Control: Inflation, currently at 34.8%, is expected to decline as the effects of the reforms take hold. The CBN aims to achieve a targeted inflation rate of 15% in 2025, requiring effective collaboration between monetary and fiscal authorities.
Policy Measures and Outlook
To support the projected growth, the CBN plans to:
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Enhance Market Confidence: By improving transparency and efficiency within the foreign exchange market, the CBN aims to bolster investor confidence and limit opportunities for arbitrage.
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Support SMEs: Strengthening the financial sector to support small and medium-sized enterprises (SMEs) and critical sectors is a priority, fostering an environment conducive to business expansion and foreign investment.
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Diversify Revenue Streams: The government is making deliberate strides to reduce dependence on the volatile oil sector through ongoing tax reforms aimed at broadening the tax base and improving collection efficiency.
While challenges such as external shocks, inflation, and global supply chain disruptions remain, the CBN's balanced approach combining short-term stability with long-term reforms positions Nigeria for sustainable economic growth in 2025.
