By Aisha Muhammad Magaji
Nigeria’s economy recorded a strong rebound in the second quarter of 2025, expanding by 4.23% year-on-year, according to fresh data released by the National Bureau of Statistics (NBS). This is the fastest pace of growth in four years, a signal that recent policy reforms and sectoral rebounds may be taking effect.
The Q2 performance outpaced the 3.13% growth seen in Q1 2025 and the 3.48% growth recorded in the same quarter of 2024. Economists say the result puts Africa’s largest economy closer to achieving its annual growth target of 4.17%.
Oil Sector Rebound
The biggest driver of growth came from the oil sector, which surged by more than 20% year-on-year, reversing years of contraction. Nigeria’s daily crude production rose as security interventions curbed theft in the Niger Delta and global oil demand remained strong.
For a country still heavily dependent on oil for revenue and foreign exchange, the recovery provided a significant boost to government earnings. Analysts, however, caution that reliance on oil remains risky, given the volatility of global prices.
Non-Oil Sector Resilience
While oil grabbed the headlines, the non-oil sector—which makes up nearly 96% of the economy also performed impressively, growing by 3.64% in Q2.
The star performer was Information and Communication Technology (ICT). The sector expanded by over 6.6% in real terms, supported by Nigeria’s booming digital economy, increased mobile broadband penetration, and rising demand for fintech and e-commerce services.
Agriculture, trade, construction, and manufacturing also contributed positively, though challenges such as high input costs and insecurity in farming communities continue to hold back faster expansion.
Impact of GDP Rebasing
Another factor shaping the numbers was the rebasing of Nigeria’s GDP earlier this year, which shifted the base year from 2010 to 2019. This adjustment updated the economy’s structure to better reflect emerging industries like technology, digital services, and parts of the informal economy.
According to the NBS, the rebasing exercise gives a clearer picture of Nigeria’s current economic realities and provides a stronger benchmark for comparison with other economies.
Good News, But Risks Remain
For policymakers, the Q2 growth figures represent a much-needed win after months of economic uncertainty. Yet experts are quick to note that headline GDP growth does not always translate to better living standards for ordinary citizens.
Nigeria continues to grapple with high inflation, which has remained above 28% throughout 2025. Rising food and transport prices mean that many families have yet to feel the impact of faster economic growth. “Growth is welcome, but until prices stabilize and jobs are created, ordinary Nigerians won’t see the difference,” said Dr. Chika Madu, an economist at the University of Lagos.
Unemployment and underemployment remain high, especially among young people, while insecurity in parts of the country continues to threaten agricultural production and investor confidence.
Government Response
The Federal Government welcomed the new figures, with the Ministry of Finance noting that reforms in fiscal management, energy transition, and digital infrastructure are beginning to yield results. Vice President Kashim Shettima, representing Nigeria at the ongoing UN General Assembly in New York, highlighted the growth numbers as evidence that “Nigeria remains a resilient investment destination in Africa.”
The Central Bank of Nigeria (CBN) also suggested that its monetary tightening raising interest rates to curb inflation—may be helping to stabilize the macroeconomic environment, even if borrowing costs remain high for businesses.
Looking Ahead
The outlook for the rest of 2025 is cautiously optimistic. If oil production remains stable and global prices hold, Nigeria could sustain its growth momentum. The expansion of the ICT sector, coupled with ongoing investments in renewable energy, agriculture, and transport infrastructure, may further diversify the economy.
However, the risks are clear. Global oil market volatility, debt service pressures, inflation, and insecurity all pose threats to sustaining the current pace. Without targeted social investments, growth could remain “on paper” rather than improving livelihoods.
Conclusion
Nigeria’s 4.23% GDP growth in Q2 2025 is a milestone worth noting. It shows that the country is capable of bouncing back and charting a more resilient path, even amid global and domestic challenges. The next step is ensuring that the gains trickle down creating jobs, reducing poverty, and making growth inclusive.
