Economic growth slows in the third quarter of 2025

Economic growth remains solid in Q3: Nigeria's GDP increased 4.0% in annual terms in Q3, following a 4.2% expansion in the previous quarter. While the reading undershot Q2’s expansion, it marginally exceeded expectations as growth remained solid by post-pandemic standards in Q3.

Oil sector weighs on momentum: The deceleration was driven by the oil sector as it expanded 5.8% on a year-on-year basis in Q3, following a 20.5% expansion in the prior quarter; crude oil production growth also eased in the third quarter relative to the prior quarter. Moreover, compared with the prior period's data, the reading for the industrial sector softened in Q3 (+3.8% in annual terms vs +7.5% in Q2). More positively, the non-oil sector grew 3.9% on a year-on-year basis in Q3, following a 3.6% expansion in the previous quarter. Readings also strengthened for the agricultural sector (+3.8% vs +2.8% in Q2) and the services sector (+4.1% vs +3.9% in Q2).

GDP growth to stabilize going forward: While our panelists expect annual GDP growth to slow from Q3’s level in Q4 2025, momentum should pick up again from the first quarter of 2026 and then stabilize near Q3’s rate in the following quarters. In 2026 as a whole, economic growth is seen hovering near 4% through 2029, in line with the post-pandemic trend. Fixed investment and public spending growth will support economic momentum next year as monetary policy easing resumes and the government hikes spending ahead of the 2027 elections. That said, softer private spending growth amid still-high inflation will drag on growth.

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