In this 2025 economic outlook, Ibrahim Apekhade Yusuf examines some of the major economic sectors whose current fundamentals and indices are already showing promises and great potential for success both on the short, medium to long term.
Apparently smarting from the bitter pills they were forced to swallow, albeit grudgingly in the last 12 months, including but not limited to high cost of living fueled by hyperinflation, diminishing currency rendered worthless compared to other currencies of the world, depleting investments, to mention just a few, not many Nigerians are optimistic about what to expect this year.
However, based on macroeconomic indicators and fundamentals showing across the major commanding heights of the economy including the oil and gas, energy, power, roads infrastructure, investment potentials in mineral explorations, agriculture, transportation, to mention just a few, and all driven by proper policy frameworks, keen economic watchers and analysts are convinced that things will definitely turnaround for good.
From available information, The Nation can authoritatively report that there are visible hints that things are looking up in areas otherwise thought impossible.
The President’s Men
According to analysts, there are some key positions of responsibility under President Bola Ahmed Tinubu with the potential to make or mar the administration and that explains why the individuals vested with such enormous responsibilities have been at their best literally working their socks off. This year even promises to be a lot of tasking for them still if the President must achieve the fundamental objectives of changing the fortunes of the citizenry for the better.
Wale Edun
The Minister of Finance and Coordinating Minister of the Economy, whose job is cut out for him is expected to deploy his hands-on experience in ensuring that the macroeconomic policies don’t miscarry but are focused on delivering the democratic dividends that would translate to succour for Nigerians in concrete terms which to the average man on the street is food on the table.
Dele Alake
The Minister of Solid Minerals Development, Dr. Dele Alake who has since developed a template encapsulated in his seven-point agenda has left no one in doubt about his desire to turn the nation’s mineral deposits into gold mines that guarantees fat bucks into the public till. The solid minerals sector projected to contribute 8 percent to the nation’s GDP has been at its lowest ebb yet, accounting for only 0.83% in 2022 and 0.75% in 2023. However, if the concerted efforts of the past 12 months are anything to go by, it is expected that the gains would start manifesting from this year.
Besides, the plan to revive over 2000 abandoned mining sites and the ultimatum to the agencies under the ministry to deliver on their mandate within the next 90 days, has already set the tone for the kind of outcome to expect from the sector in the coming months.
David Umahi
The Minister of Works, David Umahi, who can easily be described as Mr Projects is one man duty-bound to achieve the deliverables in the areas of infrastructure development across the six geopolitical zones of the country.
Umahi who understands the enormous responsibilities bestowed on him by virtue of his role, is determined to ensure that the over 2,600 inherited projects by the Tinubu-led government are all delivered on or before the end of this administration.
Addressing some journalists in Abuja recently, Umahi assured that the four Renewed Hope legacy projects and the inherited ongoing projects were on course and that milestone project execution has been adopted to ensure a sense of equality among the six geo-political zones.
Specifically, he said that some of the sections of the projects being executed nationwide, including the inherited ongoing projects, would be ready for commissioning by May 2025.
“Work is progressing on Lagos-Calabar Coastal Highway. We have the Sokoto- Badagry Superhighway. Work is seriously in progress on the project. The first 120 km, work is going on in Sokoto. It has been procured. And work is going on by Hitech, using concrete. And then, you have the Kebbi section, 250 km. Work is also going on there. And so, we believe strongly that we’ll be able to have about 20 km in both sections to commission by May 29th. In section one of the Lagos-Calabar Coastal Highway in South West, we are very sure that we’ll commission the first 20 km in section one and 10 km in section two.”
He commended the intervention of Mr. President in the area of funding of the projects despite his interventions in other critical priority sectors of the economy.
“The President has given very serious attention to road infrastructure. Don’t forget that this Coastal Highway and, of course, the four Legacy Projects all have the train track incorporated. The construction of the train track for this section I is going to take off in 2025. So this is what we are doing. And we strongly believe that the President is going to give the nation of Nigeria the road infrastructure that they have been yearning for.”
So confident of his competence and performance m, the two-term governor of Ebonyi State has declared that Nigerians should blame him if any of the roads projects assigned is not delivered. That statement, according to analysts, speaks to a sense of purpose and commitment to the ideals and ideas of service by one man!
Adegboyega Oyetola
The Minister of Marine and Blue Economy, Adegboyega Oyetola, one of the President’s Wiseman feels the weight of the responsibility and has seen to the development of the National Blue Economy strategy, which will serve as a roadmap for the sector especially because he considers very crucial to the economic prosperity of Nigeria as a whole. Bearing in mind that the sector has the potential to help increase the nation’s GDP from $403billion to $1.7trillion if properly harnessed, Oyetola, for all its worth he is not leaving any stone unturned to help actualise this cardinal objectives starting this year.
Olayemi Cardoso
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has a major role to play in the execution of the nation’s macroeconomic policies.
To that extent, he is vested with the onerous responsibility of implementing most of these policies especially with regards to monetary and fiscal policies.
A post mortem of the last one year has seen the head honcho of the apex regulatory body of banks struggling to rein in the monster of naira depreciation with all the unintended consequences such as hyperinflation, high cost of funds, among other unpleasant tales.
Interestingly, it has not been all sad tales. Despite significant challenges, the CBN made substantial strides, notably stabilising foreign reserves, which recently surpassed the $40 billion mark, the highest level in nearly three years.
While reflecting on the journey so far, Cardoso restated the CBN’s commitment to stabilising the economy, taming inflation and regaining investor confidence just as he hinted of plans to set a target to raise monthly foreign remittances to $1 billion. As a corollary, arising from some of the little wins and gains, the CBN is more than determined to ensure that these successes are not just surpassed but consolidated upon at the very least.
Sectors to watch: NNPCL
The Nigerian National Petroleum Company Limited (NNPCL), the oil behemoth clearly stands out as one company to watch out for in the year all thanks to its rising profile in recent times.
In the twilight of 2024, the NNPC shocked the nation when it announced that the Port Harcourt 65, 000 barrels per day refinery had resumed production. While the nation was still savouring that hearty news, the national oil company late December informed that the 125, 000 (bpd) Warri Refining and Petrochemical Company (WRPC) had also returned to operation with plans to accelerate repair work on Kaduna Refinery and the 150,000 (bpd) second refinery in Port Harcourt to consolidate Nigeria’s position as a global energy provider.
Expectedly, the Group Chief Executive Officer of the NNPCL, Mele Kyari has expressed optimism that the petroleum will not only unravel especially as the operations of these two refurbished refineries portend lots of positives on a larger scale especially with regards to supply, local pricing and healthy completion between Dangote refinery and others on the pipeline like the refinery being built by BUA.
Ultimately, the price war from these players would be the gains of the consuming public who stand to reap the benefits as shown already by Dangote and the NNPCL through price reduction, though infinitesimal but is expected to drop significantly as the months roll by.
According to economic watchers, the country stands to reap bountifully the benefits of full deregulation and local refining which has opened the door to increased investment in the downstream sector, which will create thousands of jobs and catalyse industrialisation since there is no longer reliant on importing refined petroleum products, all thanks to the local refining capacity with huge potential for job creations across the country.
Added to this good fortune is the ambitious plan to increase the crude oil production to three million barrels per day this year by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri.
In the midst of all this, it is also instructive to note that investment outlay in the oil and gas sector is promising to say the least. Shell and Partners announced an estimated $5 billion investment in the Bonga North oil field, with more on stream by other players in the sector.
Whither tax reforms in 2025?
Certainly, tax is one area to watch out for this year. Anyone can second guess the government on what the possible outcomes would be.
From available information, the government focuses on expanding the tax net, making taxes less burdensome to taxpayers, and getting wealthy people to pay their fair share. This progressive approach reflects the administration’s commitment to equity and fiscal sustainability.
The proposed tax reforms bills which seek to favour low-income earners, and small businesses within a certain threshold will be exempt from paying taxes, will be a gamechanger of sorts this year with as many people hitherto opposed to the reforms have backtracked having seen the essence and benefits therein.
Some of the proposals include reduction of corporate income tax rate from 30% to 25% over the next two years and elimination of earmarked taxes on companies to be replaced with a harmonised single levy at a reduced rate.
Others include elimination of minimum tax on loss-making companies and those with low margins, grant of input VAT credit to businesses on assets and services to reduce cost of investment, ability to pay taxes on foreign currency transactions in naira, WHT and VAT exemptions for small businesses and a higher threshold of N50m annual turnover for corporate income tax exemption. There will be an office of the tax ombudsman to check administrative excesses and protect vulnerable taxpayers. In addition, there tax incentives are being rationalised with clear rules to ensure certainty and provide a level playing field for all investors, while a new priority sector incentive regime will replace the current pioneer status scheme etc.
Besides, individuals earning about N1.7m or less per month will pay lower PAYE tax while those earning the new minimum wage and slightly more will be fully exempted. These thresholds will result in about 98% of workers in the public and private sector paying lower taxes while the top 2% will pay slightly more in a progressive manner up to 25% for high networth individuals.
The lowest income earners accounting for about one-third of all workers will be fully exempted from tax while low and middle income earners will pay less. This is consistent with the policy philosophy of not taxing poverty.
In addition, there are proposed changes to the income tax laws to facilitate remote work opportunities for Nigerians in Nigeria within the global business process outsourcing. This will empower our youths to play a key role in the digital economy space.
Yes naira will maintain stability!
Rising domestic prices, coupled with massive depreciation of the naira, led to the devaluation of the naira last year. But with the naira-dollar exchange rates which stabilised in the official foreign exchange (FX) market between July and December 2024, indications are that this may maintain its stability through 2025.
One of those who share this optimism is Dr. Muda Yusuf, Director and CEO of the Centre for the Promotion of Private Enterprise (CPPE).
While admitting that the naira experienced a significant period of calm in the latter half of 2024, following a turbulent 18 months, he noted that regulatory reforms and periodic interventions by the Central Bank of Nigeria (CBN) played a pivotal role in achieving this moderation in exchange rate volatility.
“By the close of the year, the official exchange rate at the Nigerian Foreign Exchange Market (NFEM) stood at N1,537, a modest rise from the average rate of N1,455.59 in January 2024 and N907.1 in December 2024. “Several factors underpin this stability and support a positive outlook for 2025. Yusuf highlighted critical developments such as Nigeria’s foreign reserves exceeding $40 billion and anticipated further improvement in reserve accretion.
“This progress is largely driven by increased inflows from International Money Transfer Operators (IMTOs) and robust diaspora remittances,” he said.
Additionally, measures like the $2 billion Eurobond proceeds, a $500 million domestic dollar bond, and the clearance of $7 billion in legacy forex obligations by the CBN are expected to bolster the central bank’s capacity to intervene in the forex market effectively.
Another game-changer is the import substitution impact of the newly operational Dangote, Port Harcourt and Warri refineries. “With these refineries easing the demand pressure on forex for fuel imports, the naira will benefit from reduced dependency on external currency flows,” Yusuf observed. He also noted a gradual recovery in the non-oil export sector, which could contribute positively to foreign exchange inflows.
“The rebound of the naira and the easing of energy costs could provide much-needed relief to the inflation trajectory,” he said. Additionally, the base effect of elevated inflation in 2024 could make 2025 figures appear comparatively moderate.
Despite these optimistic projections, Yusuf cautioned that certain inflationary pressures may persist in 2025. “Challenges such as high energy costs, transportation expenses, and insecurity affecting agricultural output will continue to influence the inflation landscape. Climate change, flooding, and global supply chain disruptions will also remain factors to watch,” he warned.
As Nigeria navigates the complexities of a dynamic global and domestic economy, the projected stability of the naira offers a silver lining. “The groundwork laid in 2024 through reforms, interventions, and strategic measures provides a solid foundation for economic resilience in 2025,” Yusuf said, stressing the importance of maintaining and enhancing these efforts in the coming year.
Promise of food security with investment boost
Food security is being enhanced this year especially with regards to local wheat production. This effort is part of a broader strategy to promote agricultural productivity and bolster economic growth through the National Agricultural Growth Scheme and Agro Pocket (NAGS-AP).
While unveiling this project in Abuja recently, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun hinted that the scheme spans 16 wheat-producing states and is designed to empower farmers with financial support and resources for improved wheat cultivation.
The initiative aims to support 280,000 smallholder farmers and a select group of medium-scale farmers organised into clusters. To facilitate input distribution, 409 redemption centres have been established nationwide, with 281 already operational. These centres have reached 68,389 farmers, representing 24.42% of the target.
Also the nation’s food potential would further be enhanced all thanks to the economic surge as Saudi Arabia’s SALIC International Investment Company acquires a 35.43% stake in Olam Agri Holdings for $1.24 billion.
Finance Minister, Wale Edun who led a delegation to the Arabian Kingdom, said the strategic deal, finalised on December 23, 2024, values Olam Agri Holdings at $3.5 billion and underscores Saudi Arabia’s growing investment in Nigeria’s key sectors.
“This $1.2 billion investment by the Saudi Agricultural Livestock Investment Company (SALIC) in Olam will significantly enhance foreign exchange inflow, create jobs, and strengthen the Nigerian economy,” Edun said.
Highlighting the broader impact of the deal, Edun added, “Saudi Arabia’s demographics mean their investments abroad are designed to create jobs locally. This transaction is a testament to the success of President Tinubu’s strategy to stabilise Nigeria’s macroeconomic environment and attract global investors.”
As Nigeria navigates its economic reforms, Edun expressed optimism for 2025, citing improved inflation control, enhanced social protections, and increased employment opportunities.
The acquisition marks a milestone in Nigeria’s economic diplomacy, aligning with Tinubu’s focus on fostering partnerships that deliver tangible benefits for the country.
As Olam Group retains a majority 64.57% stake, the deal exemplifies collaborative investment models that drive growth while preserving local interests.
The SALIC investment is expected to catalyse advancements in agriculture, strengthen Nigeria’s food security, and enhance the country’s positioning as a hub for global agricultural trade.
With the $1.2 billion Olam transaction as a template for success, Nigeria is poised to attract further foreign direct investments in agriculture, infrastructure, and beyond.
CNG all the way!
One idea that has gained lots of traction is the introduction of the Presidential Initiative on Compressed Natural Gas (CNG)-vehicles.
The last one year saw the unlocking of about $200 million private-sector investments in the sector. The CNG-powered vehicles were strategically designed to harness the nation’s abundant gas resources to crash transportation cost by about 60%, and at the same time, foster a clean and healthy environment, and were recently introduced in Nigeria as an alternative to petrol-powered cars.
The launch of the Presidential Initiative on CNG is a deliberate strategy to harness our abundant gas resources to bring down the high cost of transportation by about 60% and also foster a clean and healthy environment for our citizens. This initiative has unlocked close to $200 million in private sector investments in the last one year.
There are several more signature initiatives like this, all aimed at bringing economic relief to the Nigerian people, and fueling a chapter of industrialisation and prosperity, the likes of which we have never seen before.
This year also shows lots of promises with investment outlay according to Michael Oluwagbemi, Project Director/CEO, Presidential CNG Initiative, who admitted that investors are ramping up the development and deployment of CNG infrastructure.
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The project coordinator added that more than 2,000 Nigerians have been employed in these conversion centres, with more jobs in the offing as CNG penetration ratchets up.
“In the past year, the private sector invested over two billion naira to establish these conversion centres, and another six to 10 billion naira will go into setting up more centres to meet the targeted 1,000 centres required to transform the nation’s energy dynamics.”
Consumer credit scheme
One area the Tinubu administration is determined to develop is the consumer credit initiative, another campaign promise, and plans to deepen it in the first quarter of 2025. In the government’s wisdom, promoting access to credit is part of the administration’s broader strategy to stimulate consumption, drive entrepreneurship, and boost the domestic economy.
Interestingly, using the vehicle of the National Credit Guarantee Company (NCGC), which will be unveiled by the second quarter of the year, the government hopes to revolutionise access to credit for individuals and key sectors of the economy.
The President himself highlighted that in his New Year Day broadcast, where he emphasised his administration’s commitment to economic growth through increased credit access, stating, “In this new year, my administration will further consolidate and increase access to credit for individuals and critical sectors of the economy to boost national economic output. To achieve this, the federal government will establish the National Credit Guarantee Company to expand risk-sharing instruments for financial institutions and enterprises.”
Expectedly, the National Institute of Credit Administration (NICA), a chartered professional regulatory institute dedicated to the management of the credit management profession in Nigeria, which has been in the forefront in terms of propagating advocacy around credit economy strongly supports this initiative.
According to NICA, this development marks a critical step in addressing the challenges that micro, small, and medium enterprises (MSMEs) face in accessing business loan credit—a key driver of sustainable economic growth and development.
In a statement cited by The Nation, NICA also recalled its earlier proposal for establishing a National Credit Guarantee Corporation, submitted to the government in September 2024 through the Office of the Vice President. This aligns with the institute’s statutory mandate under Section 1, Subsection 2(f) of the NICA Establishment Act, which empowers the institute to “consult with and make recommendations to the government, regulatory bodies, trade associations, the academic community, and other professional bodies on all matters related to credit management.”
As a trusted partner in advancing Nigeria’s credit culture, NICA stands ready to provide strategic initiative, advice, and support to the government and stakeholders in implementing this vital initiative. The NCGC is expected to catalyse job creation, stimulate robust economic activities, and enhance the resilience of Nigeria’s economy by providing access to credit through a National Credit Guarantee Scheme.
The NCGC will outline the specific period of loan arrears after which the guarantee may be invoked, along with the steps the lending institution must take to demonstrate its efforts to recover the loan. Once the guarantee is approved, the responsibility rests with the guarantee organisation. The question of whether the lending institution handled the loan application with due diligence should only be revisited if there is clear evidence of misrepresentation during the loan application process. Even in such cases, to maintain confidence in the scheme, any review should occur after the claim has been settled.
For the NCGC to be successful, it must operate efficiently, professionally, and independently to ensure quick processing and settlement of claims. Excessive bureaucracy and delays in claim payments will act as major deterrents for commercial banks, discouraging their participation in the credit guarantee scheme.
