Stronger output, a firmer naira, and rising incomes signal renewed growth momentum but challenges remain……
Nigeria’s economy staged a notable comeback in 2025, with its dollar-denominated gross domestic product surging by 22 per cent to approximately $307 billion, according to a new report by Quartus Economics.
The report, titled Nigeria on the Rise Again, attributes the sharp increase to a combination of stronger domestic production and a modest appreciation of the naira, marking a clear reversal from earlier years of economic strain.
According to the findings, the country’s GDP expanded from about $252 billion in 2024 to $307.5 billion in 2025, pushing Africa’s largest economy back above the $300 billion threshold. This growth was driven primarily by an 18.43 per cent rise in nominal output, alongside a roughly three per cent strengthening of the local currency.
In naira terms, total economic output climbed significantly from N372.8 trillion to N441.5 trillion within the same period. Meanwhile, the average exchange rate improved slightly, reinforcing gains in dollar terms and enhancing the overall value of economic activity.
The report highlights that Nigeria’s performance outpaced the Sub-Saharan Africa average dollar GDP growth of just over 10 per cent. It also exceeded growth levels recorded by several major African economies, including South Africa, Egypt, Algeria, Kenya, and Angola. Among its peers, only Ghana posted a stronger expansion during the period.
Nigeria’s contribution to Africa’s overall economic growth was equally significant, accounting for nearly 28 per cent of the continent’s total GDP increase in dollar terms. Its share of Africa’s economy also rose, reflecting a gradual strengthening of its position within the region.
Beyond the headline figures, improvements were also recorded in income levels. GDP per capita rose by nearly 20 per cent to $1,295 in 2025, up from $1,083 a year earlier. This increase came despite continued population growth, suggesting that economic expansion is beginning to outpace demographic pressures.
The report notes that this rise in per capita income exceeded regional averages and surpassed gains recorded in several comparable economies, even as Nigeria continues to trail some of its peers in absolute terms.
A key factor behind these gains has been improved currency stability, which helped preserve purchasing power and restore confidence after previous periods of volatility. At the same time, economic growth is increasingly being driven by real sector activities rather than relying predominantly on services.
However, the report stresses that there is still significant room for improvement particularly in industrial output. Expanding manufacturing and boosting productivity across key sectors are seen as critical steps for sustaining long-term growth.
Population trends also played a role in the improved outlook. While Nigeria’s population continues to grow, the pace has slowed relative to economic expansion, creating space for meaningful gains in per capita income.
This marks a shift from the period between 2020 and 2023, when population growth far outstripped economic performance, contributing to worsening poverty levels. More recent data suggests that the balance is beginning to tilt in a more favorable direction.
Despite the positive trajectory, the report cautions that current GDP levels and income metrics remain below historical highs and lag behind several aspirational peers. Sustaining the recovery, it notes, will require consistent macroeconomic management, deeper structural reforms, and a continued focus on productivity.
Supporting this outlook, official data shows that Nigeria’s economy grew by 4.07 per cent year-on-year in the fourth quarter of 2025, an improvement from the 3.76 per cent recorded in the same period of 2024.
On a full-year basis, growth reached 3.87 per cent exceeding both the previous year’s performance and projections by the International Monetary Fund.
Together, these indicators point to a rebuilding momentum. While challenges persist, Nigeria appears to be regaining its footing, with early signs suggesting a return to sustained economic expansion if current reforms and policies are maintained.
