2024: Despite macroeconomic challenges, Nigeria demonstrated resilience with 3.6% GDP growth — CPPE
By Seun Ibiyemi
Despite facing significant macroeconomic challenges in 2024, Nigeria demonstrated resilience with a 3.6% growth in Gross Domestic Product (GDP), aligning with the International Monetary Fund’s (IMF) forecast for Sub-Saharan Africa and surpassing the global average of 3.2%. However, structural and sectoral disparities continue to impede broad-based economic progress.
The services sector led the economic growth, with financial services posting an impressive 32% growth in Q3 2024. Other sectors such as insurance (19.8%), rail transport (19.7%), and road transport (17.9%) also performed strongly. In contrast, key sectors like agriculture and manufacturing grew by just 1.14% and 0.92%, respectively, while industries like air transport, quarrying, petroleum refining, and textiles remained in recession.
Dr. Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), stressed the importance of addressing the growing divide between the financial and real sectors. “The decoupling of financial services from the real economy poses a significant threat to job creation and poverty reduction. Urgent policy measures are needed to encourage investment in the real sector,” he said.
In Q3 2024, the non-oil sector contributed 94.43% of Nigeria’s GDP, while the oil sector accounted for just 5.57%. However, the oil sector remains dominant in foreign exchange earnings, highlighting a structural imbalance. Strengthening the non-oil sector’s competitiveness and productivity remains a critical policy focus.
Yusuf noted that Nigeria’s exchange rate stabilised in the second half of 2024, closing at ¦ 1,537 to the dollar, supported by regulatory reforms and interventions from the Central Bank. Positive factors for 2025 include improved foreign reserves (exceeding $40 billion), increased diaspora remittances, and the operationalisation of the Dangote and Port Harcourt refineries, expected to ease foreign exchange demand.
Inflation peaked at 34.2% in November 2024, driven by high energy and transportation costs. Although inflation is projected to moderate slightly in 2025 due to exchange rate stability and a rebound in the naira, persistent drivers such as energy costs, climate change, and global geopolitical tensions remain concerning. Tight monetary policies by the Central Bank of Nigeria (CBN) are expected to continue, though at a reduced pace.
“The energy sector shows promise, driven by increased domestic refining capacity from the Dangote and Port Harcourt refineries. However, unresolved issues in electricity pricing, infrastructure, and state-level regulatory transitions pose risks. Opportunities abound in renewable energy, compressed natural gas (CNG), and decentralized electricity provision,” Yusuf added.
To address these challenges, Yusuf recommended boosting the capitalisation of development finance institutions, easing monetary tightening, and incentivising investments in real-sector industries. He also advised businesses to focus on cost optimisation, technology adoption, and integrating domestic supply chains to navigate economic uncertainties in 2025.
Looking ahead, Yusuf concluded that the economic outlook for Nigeria in 2025 is cautiously optimistic, driven by ongoing reforms and emerging opportunities in key sectors. However, achieving sustainable growth will require decisive action to address structural bottlenecks, promote inclusive development, and enhance the competitiveness of the non-oil sector.
