Nigeria’s economy grew by an estimated 3.7 per cent in the first half of 2025, largely fuelled by increased crude oil production and improved conditions in the manufacturing and services sectors.
The growth estimate is based on the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report compiled by S&P Global and released on Tuesday.
Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, said, “Insights from the monthly PMIs and crude oil production data from the Nigerian Upstream Petroleum Regulatory Commission suggest an economy that grew by an estimated 3.7 per cent y/y in H1 2025, supported by higher crude oil production and improved growth in manufacturing and services, while agriculture continues to lag its long-term average growth rate of 3.6 per cent.”
Oni added that Nigeria’s economy is still on track to grow by 3.5 per cent in real terms for the year. However, post-GDP rebasing may raise this to around 4.2 per cent. “We still expect the Nigerian economy to grow by 3.5 per cent y/y in real terms in 2025, but post-GDP rebasing may amplify this growth to 4.2 per cent y/y,” he said.
He also projected a drop in interest rates over the next two years. “Given that inflation is expected to remain softer compared to the 2024 average, interest rates are likely to be lower this year and next. We expect a 150–200 bps rate cut in 2025 and a 200–250 bps cut in 2026,” Oni explained.
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The World Bank has also maintained its growth projection of 3.6 per cent for Nigeria in 2025, slightly higher than the 3.4 per cent growth recorded in 2024. This is below the Central Bank of Nigeria’s forecast of 4.17 per cent and well below the Nigerian Economic Summit Group’s 5.5 per cent prediction made in January.
In terms of business activity, the June PMI showed a slight cooling. The index dropped to 51.6 from 52.7 in May, indicating growth for the seventh month running but at a slower pace.
“Where output rose, respondents linked this to higher new orders and the acquisition of new customers. Indeed, new increased solidly in June, though the pace of expansion slowed to a five-month low,” the report noted.
Despite the slowdown, business confidence improved, with sentiment reaching its highest level since August 2022. Companies cited planned expansions and infrastructure investments as reasons for their optimism.
While employment remained stable, work backlogs continued to rise, mainly due to material shortages, delayed payments, and erratic electricity supply. Delivery delays were also reported in some areas due to poor road conditions.
The PMI report, based on a survey of around 400 firms across agriculture, manufacturing, construction, services, retail, mining, and wholesale sectors, has been a regular economic barometer since January 2014.