Eight Events that Shaped Nigeria’s Economy in 2025

At the beginning of 2025, the economy was still weighed down by high inflation, elevated interest rates, weak consumer demand, and subdued business activity following subsidy removal, exchange-rate liberalisation, and aggressive monetary tightening in previous periods.

Inflation remained one of the defining challenges at the start of the year, driven largely by food prices, energy costs, and the pass-through effects of earlier naira depreciation.

These pressures eroded household purchasing power and constrained consumption. However, as the year progressed, the National Bureau of Statistics (NBS) rebased Nigeria’s Gross Domestic Product (GDP) and the Consumer Price Index (CPI), a process of revising the base year or reference point used to calculate various key economic indicators.

For inflation, the proposed new base year for its computation is 2024, intending to capture the structural changes in the economy driven by the removal of subsidies on petrol and the foreign exchange rate.

While GDP, the NBS opted for 2019 as the new base year because economic activities were relatively stable that year, compared to subsequent years disrupted by the impact of the COVID-19 pandemic and policy shifts.

The rebased GDP is expected to capture new economic segments, such as the digital economy, activities of pension fund administrators, the National Health Insurance Scheme, the Nigerian Social Insurance Trust Fund, activities of modular refineries, domestic households as employers of labour, and coverage of illegal and hidden activities.

According to the NBS, the Nigerian economy grew by 3.98 percent in the third quarter of 2025, representing a sharp increase from the 3.86 percent growth recorded in the third quarter of 2024.

The services sector continued to dominate, representing 53.02 percent of GDP. Trade activity contributed 16.42 percent, reflecting sustained household consumption and retail spending across the country. Real estate also proved resilient, accounting for 13.36 percent of output

Also, the Nigerian economy ended the year with an inflation rate of 14.45 percent in November, aligning with the president’s projected figure of 15 percent at the end of 2025 and the budget’s projected target.

Nigeria’s 2025 Budget, themed “Budget of Restoration,” aims to stabilise the economy by targeting a significant drop in inflation from over 34 percent to around 15-16 percent, alongside achieving GDP growth and exchange rate stability (N1500/$1).

Bola Tinubu also set an inflation target of 15 percent for Nigeria by the end of December 2025. He announced this goal during his presentation of the 2025 Appropriation Bill to the National Assembly in December 2024 and reiterated it in his New Year’s address for 2025.

However, Coronation Asset Management analysts expect a reversal of the current disinflationary trend in December, projecting a sharp rise in inflation at year-end. The firm attributed the anticipated increase largely to base-year effects.

On a month-on-month basis, Coronation Asset Management anticipates that the uptick in headline inflation will persist, reflecting sustained festive-season demand pressures.

“For December, we expect a reversal of the current disinflationary trend, with inflation projected to rise sharply at year-end, largely reflecting a statistical base-year effect. On a month-on-month basis, we expect an uptick in headline inflation to persist, reflecting sustained festive-season demand pressures, elevated transport activities associated with holiday travel, and continued cost pass-through from higher logistics and service-sector prices,” the report indicated.

During an annual banker’s dinner, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), said that the bank could resume interest-rate cuts next year if inflation continues to cool.

“Our models project continued disinflation in 2026, helped by stronger domestic production, improved foreign exchange liquidity, and more disciplined liquidity management. As inflation moderates and becomes firmly anchored, we will calibrate the policy rates in line with evolving data,” he said.

At the last monetary policy committee meeting in November, CBN surprised market watchers by retaining its interest rate at 27 percent to sustain the progress made so far towards achieving low and stable inflation.

According to CardinalStone Research’s 2026 outlook, stronger business confidence and a gradually improving macroeconomic backdrop supported recoveries across key sub-sectors — notably agriculture, construction, crude petroleum & natural gas, telecommunications, information services, and financial services.

“By contrast, consumer-driven industries such as food, beverage & tobacco; textile, apparel & footwear; trade; and real estate continued to lag, held back by subdued household demand amid elevated inflation and constrained disposable incomes.”

Here are 8 events that shaped the economy in 2025

Nigeria Exits the FATF Grey List
Global watchdog, Financial Action Task Force, removed Nigeria from its grey list, ending nearly three years of being tagged a destination for dirty money and signaling a boost for investor confidence in the nation’s economy

Nigeria was removed from the list alongside South Africa, Burkina Faso, and Mozambique after their governments stepped up efforts to combat money laundering and terrorist financing.

The exit of Nigeria from the FATF grey list has restored global confidence in the country’s financial system and saved the economy from losing more than $30 billion in potential investments.

The signing of the tax reform act
The signing of the Tax Reform Act by President Bola Tinubu in June marked a major shift in Nigeria’s fiscal policy architecture.

These acts overhaul Nigeria’s tax system, aiming to streamline administration, boost revenue, and protect low-income earners. The new laws are set to take effect from January 1, 2026.

The new Investment and Securities Act strengthens capital market oversight
President Bola Ahmed Tinubu has signed the Investment and Securities Act (ISA) 2024 into law, marking a significant step in Nigeria’s capital market reform.

The new law, which repeals the 2007 Investment and Securities Act, aims to strengthen the legal and regulatory framework for investments and capital market activities.

The law strengthened investor protection, improved market discipline, and provided a clearer framework for alternative and digital assets. It was widely seen as a confidence-building reform needed to deepen Nigeria’s capital market and attract long-term funding.

Banks and insurance recapitalisation process
In November, the CBN revealed that 16 banks have met its recapitalisation threshold, marking steady progress in the industry’s efforts to strengthen balance sheets and comply with new regulatory requirements ahead of the March 2026 deadline.

In August, the Federal Government raised the minimum capital requirements for insurance companies by fivefold, giving operators 12 months to comply or risk losing their licenses.

The directive, issued by the National Insurance Commission (NAICOM), follows the enactment of the Insurance Industry Reform Act, signed into law by President Bola Ahmed Tinubu.

Under the new rules, non-life insurers must increase capital from N3 billion to N15 billion, life insurers from N2 billion to N10 billion, and reinsurers from N10 billion to N35 billion. The reform aims to strengthen the industry’s financial resilience and capacity.

Capital market moves to T+2 settlement
Nigeria’s equity market recorded a structural upgrade with the transition from a T+3 to a T+2 settlement cycle. The reform shortened transaction settlement time, improved liquidity, and aligned the market with international best practices.

For foreign portfolio investors, the move reduced settlement risk and enhanced market efficiency, reinforcing efforts to restore confidence in Nigeria’s capital market after years of volatility.

Dangote refinery vs importers
The Dangote Refinery’s growing dominance in the downstream oil sector became a defining economic storyline of the year. As domestic refining expanded, friction emerged between the refinery and fuel importers over pricing, supply arrangements, and crude access.

The shift reduced Nigeria’s dependence on fuel imports, eased pressure on foreign exchange demand, and altered inflation dynamics, underscoring the refinery’s growing macroeconomic significance.

M&A activity signals corporate repositioning
Mergers and acquisitions gained momentum across corporate Nigeria as firms responded to tighter financial conditions and recapitalisation demands. High-profile deals, including the acquisition of Chivita|Hollandia (CHI Limited) by UAC, the Union Bank of Nigeria merger with Titan Trust Bank Limited, and the FBNQuest Merchant Bank Limited acquisition by EverQuest.

GTB listing on the London Exchange
GTBank became the first Nigerian bank to be listed on the London Stock Exchange on July 9, marking a significant step in Nigerian banks’ international expansion.

The move underscored the growing need for access to deeper pools of foreign capital and positioned the bank, and by extension the sector, more firmly within global financial markets despite ongoing domestic economic adjustments.