Economic growth rises in the fourth quarter of 2025

GDP growth picks up in Q4: Nigeria's GDP grew 4.1% in annual terms in Q4, following a 4.0% expansion in the prior quarter, coming in above the past five-year average. In 2025 as a whole, the economy expanded 4.1%, accelerating from 2024’s 3.8%.

Reforms drive broad-based expansion: The non-oil sector expanded 4.0% in annual terms in Q4, following 3.9% growth in the prior quarter. Moreover, the oil sector expanded 6.8% on a year-on-year basis in Q4, following 5.8% growth in the prior quarter. Relative to the previous quarter's data, readings in Q4 improved for the agricultural sector (+4.0% in annual terms vs +3.8% in Q3), the industrial sector (+3.9% vs +3.8% in Q3) and the services sector (+4.2% vs +4.1% in Q3). According to the presidency, Q4’s strong showing came off the back of improved fiscal coordination, cautious public expenditure management, stronger revenue mobilization and sustained structural reforms aimed at restoring credibility and supporting investor confidence. Agricultural output benefited from improved security in food-producing areas and better access to inputs, while services gained steam amid continued expansion in finance, telecommunications, trade and technology-driven activities. Regarding the industrial sector, healthier foreign exchange liquidity, reforms in the energy sector and stronger investor confidence supported growth.

GDP growth seen stabilizing ahead: GDP growth is seen broadly stabilizing around Q4’s rate in the coming quarters. In 2026 as a whole, economic growth should hold steady at 2025’s pace and hover close to the sub-Saharan African average. Domestic demand will be supported by lower inflation and interest rates, and the associated improvement in business and consumer confidence. Moreover, the planned ramp-up at the Dangote refinery will provide tailwinds. On the external front, merchandise shipment growth will lose steam, as oil production falls just below Nigeria's OPEC production cap of 1.5 million barrels per day this year. However, the ramping-up of capacity at the Dangote refinery complex, which is now producing a surplus of refined products for export, will keep export growth robust. The unfolding of the U.S.-Iran conflict is key to monitor, as high oil prices could boost government revenue.

Panelist insight: Commenting on the outlook, Fitch Solutions analysts stated:“Nigeria stands out as the most likely to benefit from unfolding events in the Middle East. As a net crude exporter, higher benchmark prices are expected to boost export receipts and support external resilience. The ramp-up of domestically refined fuel from the Dangote refinery since September 2024 has also reduced Nigeria’s exposure to global refined product price spikes, partially shielding the domestic economy from a pass-through that previously offset the benefits of higher crude (although we note that domestic prices do still move in line with market benchmarks).”

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