The Centre for the Promotion of Private Enterprise (CPPE), a prominent policy think-tank in Nigeria, has declared that the nation’s economy is not only recovering but also gaining significant momentum, despite persistent structural and macroeconomic challenges. This optimistic assessment comes in the wake of the latest economic data released by the National Bureau of Statistics (NBS), which revealed that Nigeria’s real Gross Domestic Product (GDP) grew by an impressive 4.23% year-on-year in the second quarter of 2025. This marks a notable improvement from the 3.13% growth recorded in the first quarter of 2025 and a stronger performance compared to the 3.48% growth observed in the same period of the previous year. The CPPE’s analysis underscores the resilience of Nigeria’s economy, driven by key sectors such as oil and gas, agriculture, and services, while highlighting the need for sustained reforms to ensure long-term prosperity.
Economic Growth Driven by Key Sectors
The standout performer in Q2 2025 was the oil and gas sector, which recorded a remarkable growth rate of 20.46%, its strongest performance in years. This surge can be attributed to a combination of strategic policy reforms, enhanced governance within the Nigerian National Petroleum Corporation (NNPC), and favorable conditions in the global oil market. The oil and gas sector, a cornerstone of Nigeria’s economy, has historically played a pivotal role in driving economic growth, and its robust performance in Q2 2025 signals a positive shift in the sector’s contribution to national output. The reforms implemented by the government, including efforts to improve transparency and efficiency at NNPC, have evidently borne fruit, while rising global oil prices and stable production levels have further bolstered the sector’s output.
Agriculture, another critical sector, also showed signs of recovery, posting a growth rate of 2.82% in Q2 2025, a significant improvement from the marginal 0.07% recorded in Q1. This rebound was driven by improved rainfall patterns, which enhanced agricultural productivity, particularly in crop production, and targeted government interventions aimed at supporting farmers. Initiatives such as subsidized fertilizer distribution, improved access to seeds, and investments in irrigation infrastructure have begun to yield positive results. The recovery in agriculture is particularly significant given its role as a major employer of labor and its contribution to food security in Nigeria. The sector’s growth, though modest compared to oil and gas, reflects the potential for agriculture to drive inclusive economic development if supported by sustained policy measures.
The services sector, which remains the backbone of Nigeria’s economy, contributed 56.53% to the GDP in Q2 2025. Within this sector, financial services and information and communication technology (ICT) were standout performers. The financial services sector grew by an impressive 16.18%, driven by increased digital banking adoption, innovative financial products, and a growing fintech ecosystem. The ICT sector, a key driver of Nigeria’s digital economy, expanded by 6.60%, reflecting the continued growth of telecommunications, e-commerce, and digital services. These sectors have benefited from Nigeria’s youthful population, increasing smartphone penetration, and investments in digital infrastructure, positioning them as critical pillars of economic growth.
Challenges in Trade and Real Estate
Despite the overall positive economic performance, not all sectors experienced growth in Q2 2025. The trade and real estate sectors faced challenges, reflecting weak consumer demand and affordability pressures. The trade sector, which includes wholesale and retail activities, slowed due to reduced purchasing power among Nigerian consumers, who continue to grapple with high inflation and rising living costs. Similarly, the real estate sector, which has been hampered by high interest rates and limited access to affordable housing, recorded sluggish growth. These challenges highlight the uneven nature of Nigeria’s economic recovery, with some sectors thriving while others struggle to gain traction.
Bright Spots and Persistent Weaknesses
Beyond the headline sectors, other areas of the economy showed notable performance. The coal mining sector rebounded impressively, growing by 57.53%, driven by renewed interest in alternative energy sources and improved operational efficiencies. Livestock production also recorded a recovery, supported by government programs aimed at boosting animal husbandry and reducing Nigeria’s reliance on imported dairy and meat products. These bright spots indicate the potential for diversification in Nigeria’s economy, reducing its dependence on oil and gas.
However, certain sectors continued to face significant challenges. The textiles industry, for instance, contracted due to high production costs, competition from imported goods, and limited access to modern equipment. Similarly, the motor vehicle assembly sector struggled, reflecting the broader challenges faced by Nigeria’s manufacturing industry, including high energy costs, inadequate infrastructure, and limited access to credit. These contractions underscore the need for targeted interventions to revive struggling industries and unlock their potential to contribute to economic growth.
CPPE’s Call for Structural Reforms
While the Q2 2025 GDP figures paint an encouraging picture, the CPPE emphasized that sustaining this growth momentum requires addressing deep-rooted structural challenges. Dr. Muda Yusuf, the Director of CPPE, highlighted the need for comprehensive reforms to translate economic growth into tangible benefits such as job creation, poverty reduction, and shared prosperity. “Q2 2025 is a clear statement that Nigeria’s economy is moving beyond stabilization toward stronger recovery,” Dr. Yusuf noted. “But translating growth into jobs, poverty reduction, and shared prosperity requires unlocking productivity in agriculture, manufacturing, construction, real estate, and trade.”
To achieve this, the CPPE advocated for a multi-pronged approach to address key bottlenecks. First, reducing energy and logistics costs is critical to enhancing the competitiveness of Nigerian businesses. High electricity tariffs and unreliable power supply remain major obstacles for manufacturers and small businesses, while inefficiencies in transportation and logistics drive up the cost of goods and services. Investments in renewable energy, grid modernization, and transportation infrastructure could significantly lower these costs and boost productivity across sectors.
Second, expanding infrastructure investment is essential to support economic growth. Nigeria’s infrastructure deficit, including inadequate roads, railways, and ports, continues to hamper economic activity. Public-private partnerships (PPPs) and innovative financing models could help bridge this gap, enabling the government to deliver critical infrastructure projects without placing undue strain on public finances.
Third, improving access to credit for farmers and micro, small, and medium enterprises (MSMEs) is vital for inclusive growth. MSMEs account for a significant share of employment in Nigeria but often struggle to access affordable financing due to high interest rates and stringent collateral requirements. Expanding microfinance programs, guaranteeing loans for small businesses, and promoting financial inclusion could empower these enterprises to scale up and contribute to economic development.
Finally, promoting local content is key to reducing Nigeria’s reliance on imports and fostering self-sufficiency. Policies that incentivize the use of locally produced goods and services, coupled with investments in research and development, could strengthen domestic industries and create jobs. For instance, supporting local manufacturers in sectors like textiles and agro-processing could help revive struggling industries and reduce the trade deficit.
Broader Implications for Nigeria’s Economy
The 4.23% GDP growth in Q2 2025 signals that Nigeria is on a promising trajectory, but the road to sustained and inclusive growth remains challenging. The oil and gas sector’s strong performance underscores its continued importance to the economy, but over-reliance on this sector exposes Nigeria to the volatility of global oil markets. Diversifying the economy by strengthening agriculture, manufacturing, and services is therefore critical to building resilience and ensuring long-term prosperity.
Agriculture, in particular, holds immense potential for transforming Nigeria’s economy. With a large and growing population, the country has a ready market for agricultural products, and investments in modern farming techniques, value chains, and agro-processing could drive significant growth. The rebound in agriculture in Q2 2025 is a positive sign, but sustained efforts are needed to address challenges such as land tenure issues, inadequate storage facilities, and limited access to markets.
The services sector, led by financial services and ICT, continues to be a bright spot in Nigeria’s economy. The growth of fintech and digital services reflects Nigeria’s potential to become a leader in Africa’s digital economy. However, ensuring that these benefits reach underserved populations, particularly in rural areas, requires expanding digital infrastructure and promoting digital literacy.
The challenges in trade and real estate highlight the broader issue of weak consumer demand, which is closely tied to high inflation and unemployment. Addressing these issues will require a combination of monetary and fiscal policies to stabilize prices, boost incomes, and create jobs. For instance, targeted subsidies for essential goods and services could ease the burden on low-income households, while skills development programs could enhance employability and reduce poverty.
Policy Recommendations for Sustained Growth
To sustain the economic momentum observed in Q2 2025, the CPPE’s recommendations provide a roadmap for policymakers. First, the government should prioritize fiscal discipline to create a stable macroeconomic environment. This includes managing public debt, reducing wasteful expenditure, and improving revenue collection through tax reforms. A stable fiscal environment will enhance investor confidence and attract both domestic and foreign investment.
Second, monetary policy should focus on controlling inflation while supporting growth. The Central Bank of Nigeria (CBN) could explore targeted interventions, such as lowering interest rates for priority sectors like agriculture and manufacturing, to stimulate investment without fueling inflation. Additionally, maintaining exchange rate stability is crucial to reducing the cost of imported inputs and boosting the competitiveness of Nigerian exports.
Third, the government should accelerate reforms in the energy sector to address the high cost of electricity and fuel. Investments in renewable energy sources, such as solar and wind, could provide affordable and sustainable power for businesses and households. Similarly, modernizing the national grid and improving distribution networks could enhance the reliability of electricity supply, reducing the reliance on costly generators.
Fourth, strengthening institutions and governance is essential to sustaining economic growth. Corruption, bureaucratic inefficiencies, and regulatory bottlenecks continue to deter investment and hinder business operations. Streamlining regulatory processes, enhancing transparency, and strengthening anti-corruption measures could create a more conducive environment for economic activity.
Finally, fostering regional and international trade partnerships could open new markets for Nigerian goods and services. Leveraging the African Continental Free Trade Area (AfCFTA) to boost intra-African trade, as well as securing trade agreements with global partners, could enhance Nigeria’s export potential and drive economic growth.
The Path to Shared Prosperity
The 4.23% GDP growth in Q2 2025 is a testament to Nigeria’s economic resilience and potential. The strong performance of the oil and gas sector, coupled with rebounds in agriculture and continued growth in services, signals that the economy is moving in the right direction. However, translating this growth into tangible improvements in the lives of Nigerians requires addressing structural challenges and prioritizing inclusive development.
As Dr. Muda Yusuf aptly stated, unlocking productivity in key sectors such as agriculture, manufacturing, construction, real estate, and trade is essential for creating jobs, reducing poverty, and achieving shared prosperity. By implementing targeted reforms, investing in infrastructure, and fostering an enabling environment for businesses, Nigeria can build on the momentum of Q2 2025 and chart a path toward sustainable and inclusive economic growth.
In conclusion, Nigeria’s economy is at a critical juncture. The positive GDP growth figures for Q2 2025 provide a foundation for optimism, but sustained efforts are needed to overcome longstanding challenges. By addressing energy and logistics costs, expanding infrastructure, improving access to credit, and promoting local content, Nigeria can unlock its full economic potential and deliver prosperity to its citizens. The journey to a thriving, inclusive economy is underway, and with the right policies and commitment, Nigeria can achieve lasting success.
