Nigeria’s economy forecasted to stabilise in 2025 despite current challenges
BY MOTOLANI OSENI
The year 2025 offers a glimmer of hope for economic stability in Nigeria, following two tumultuous years marked by high inflation and a depreciating currency.
According to the Coronation Research 2025 Year Ahead report, economic policies implemented since mid-2023 by the Federal Government and the Central Bank of Nigeria (CBN) are gradually setting the stage for a more stable outlook, even as the immediate impact remains challenging.
Inflation has continued to rise, climbing from 28.20 per cent year-on-year (y/y) in November 2023 to 34.60 per cent in November 2024. The Naira, which experienced a dramatic 49.1 per cent depreciation against the US dollar in 2023, has fallen by an additional 41.0 per cent in 2024 as of late December. While these figures may paint a grim picture, the report urges patience, emphasising that the effects of economic policies are often cumulative and take time to manifest fully.
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The CBN has been at the forefront of efforts to stabilise the economy, raising its policy rate by 875 basis points over the past year to 27.50 per cent. This aggressive monetary tightening has significantly influenced the fixed-income market, with the yield on 1-year Treasury bills in the secondary market soaring from 11.77 per cent per annum to around 26.00 per cent. These measures aim to curb inflationary pressures and attract investment into the financial system.
Another critical step has been addressing the flow of unfunded loans from the CBN to the government, a practice that had contributed to fiscal imbalances in previous years. By implementing tighter fiscal discipline, authorities are working to restore confidence in Nigeria’s economic management and create a foundation for sustainable growth.
While the immediate effects of these reforms have been painful for businesses and households, policymakers remain optimistic about their long-term benefits. The Coronation Research 2025 Year Ahead report highlights the importance of patience and perseverance, noting, “The groundwork laid over the past two years is crucial for fostering a resilient and competitive economy.”
The monetary and fiscal measures are expected to stabilise the currency, reduce inflationary pressures, and create a conducive environment for investment. As Nigeria looks ahead to 2025, there is cautious optimism that these efforts will yield tangible results, paving the way for improved economic conditions and growth.
